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Question 1: On October 1, 2018, Highview Company borrows $213,000 on a three-year note that requires the company to pay 8% interest on March 31 and September 30. On December 31, 2018, the adjusting entry to accrue interest on the note should debit:
Multiple Choice
Option 1: Interest Expense and credit Interest Payable for $4,260.
Option 2: Interest Payable and credit Interest Expense for $4,260.
Option 3: Interest Expense and credit Cash for $8,520.
Option 4: Interest Expense and credit Interest Payable for $8,520.
Financial Statement Analysis and Preparation
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