Question - On January 1, Calvin Company borrowed $30,000 from a local bank on a 15 year note. What (if any) adjusting entry is required on January 31? (Assume the interest owing is $250).
1. Debit interest expense and credit cash $250
2. Debit loan payable and credit interest payable $250
3. Debit interest expense and credit interest payable $250
4. Debit interest payable and credit loan payable $250
5. None of the above because no journal entry is required