On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on Mar, 2022, Daylight Donuts would: (Do not round your intermediate calculations.)

A) Debit Interest Expense, $3,000.

B) Debit Interest Expense, $1,500.

C) Debit Interest Payable, $1,500.

D) Debit Interest Expense, $4,500.

Answer: B

On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on Mar, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

A) $0.

B) $1,500.

C) $3,000.

D) $4,500.

Answer: C

On December 1, 2021, Old World Deli signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2022. Old World Deli should record which of the following adjusting entries at December 31, 2021?

A) Debit Interest Expense and credit Interest Payable, $7,500.

B) Debit Interest Expense and credit Cash, $7,500.

C) Debit Interest Expense and credit Interest Payable, $1,250.

D) Debit Interest Expense and credit Cash, $1,250.

Answer: C