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Which credit is correctly included in the adjusting entry

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Reference no: EM132768656

On December 1 of Year 1, a company borrowed $50,000 from a bank. The interest rate on the loan is 6%. No cash payments will be made on the loan until November 31 of Year 2.

Problem 1: Which debit or credit is correctly included in the adjusting journal entry necessary on the company's books (the borrower) on December 31 with respect to this loan?

A. Credit to interest expense for $2,750
B. Debit to interest expense for $250
C. Debit to interest expense for $2,750
D. Credit to interest expense for $250

Reference no: EM132768656

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