23) On March 1, a company borrowed $60,000 under a one-year loan agreement. The annual interest rate is 6%. As of the end of the year, no entry has yet been made to record the accrued interest on the loan. Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 to record the unpaid interest? ○ Credit to interest payable for $600. O Credit to cash for $600. ○ Debit to interest expense for $3,000. ◇ Debit to interest payable for $3,000.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...
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23) On March 1, a company borrowed $60,000 under a one-year loan
agreement. The annual interest rate is 6%. As of the end of the year, no entry
has yet been made to record the accrued interest on the loan.
Which debit or credit is correctly included in the adjusting journal entry
necessary on December 31 to record the unpaid interest?
○ Credit to interest payable for $600.
O Credit to cash for $600.
○ Debit to interest expense for $3,000.
◇ Debit to interest payable for $3,000.
Transcribed Image Text:23) On March 1, a company borrowed $60,000 under a one-year loan agreement. The annual interest rate is 6%. As of the end of the year, no entry has yet been made to record the accrued interest on the loan. Which debit or credit is correctly included in the adjusting journal entry necessary on December 31 to record the unpaid interest? ○ Credit to interest payable for $600. O Credit to cash for $600. ○ Debit to interest expense for $3,000. ◇ Debit to interest payable for $3,000.
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