Question

On November 1, Lance Co. borrows $90,000 cash from First Bank by signing a 90-day, 5% interest-bearing note. On December 31, Lance will record an adjusting entry by crediting _______ in the amount of ______. Multiple choice question. Interest Expense; $1,125 Interest Payable; $750 Interest Payable; $1,125 Cash; $750 Cash; $1,125 Interest Expense; $750

Answer 1

Interest Payable; $750

Step-by-step explanation:

Based on the information given On December 31, he will record an adjusting entry by crediting INTEREST PAYABLE in the amount of $750

which is Calculatedd as:

Interest Payable=$90,000*.05*(60/360)

Interest Payable=$750