Manhattan Company recorded an adjusting entry to accrue interest owed of $1300 as of December 31, Year 1. When the related note was paid during Year 2, the company paid $2450 in interest. Which of the following journal entries correctly records this Year 2 transaction? (Assume that the entry to record the payment of the note itself was recorded in a separate journal entry.)
A.
| Interest expense | 2450? | |
| Cash | 1300? | |
| Interest payable | 1150? |
B.
| Interest expense | 1150? | |
| Interest payable | 1300? | |
| Cash | 2450? |
C.
| Interest expense | 2450? | |
| Cash | 2450? |
D.
| Interest expense | 1150? | |
| Cash | 1150? |
Answer: B
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