Michigan Bank Lends Canton Furniture company $100,000 on December 1. Canton Furn

Question

Michigan Bank Lends Canton Furniture company $100,000 on December 1. Canton Furniture Company signs a $100,000, 8%, 4 - month note. The entry made by Canton Furniture Company on December 31 to record the accrued interest on the note would be: a.) a debit to interest expense and a credit to interest payable of $666.67 b.) a debit to interest payable and a credit to cash $666.67 c.) a debit to interest expense and a credit to cash of $667.67 d.) a debit to interest payable and a credit to interest expense of $666.67

Explanation / Answer

d.) a debit to interest payable and a credit to interest expense of $666.67

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