On November 1, Jasper Company loaned another company $100,000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The adjusting entry needed on December 31 is:
A. Debit Interest Expense, $5,000; credit Interest Payable, $5,000.
B. No entry required.
C. Debit Interest Expense, $1,000; credit Note Payable, $1,000.
D. Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000.
E. Debit Interest Receivable, $500; credit Interest Revenue, $500.
Answer: D
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