On September 1, Bud's Painting Service borrows $150,000 from Highlands Bank on a 4- month, $150,000, 6% note. What entry must Bud's Painting Service make on December 31 before financial statements are prepared?
a. Interest Payable 3,000 Interest Expense 3,000
b. Interest Expense 9,000 Interest Payable 9,000
c. Interest Expense 3,000 Interest Payable 3,000
d. Interest Expense 3,000 Notes Payable 3,000
Ans: c. Interest Expense 3,000 Interest Payable 3,000
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