On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What is the adjusting entry to record the accrued interest on December 31?
A. Debit Interest Expense, $75; Credit Notes Payable, $75.
B. Debit Interest Expense, $150; Credit Interest Payable, $150.
C. Debit Interest Expense, $75; Credit Interest Payable, $75.
D. Debit Interest Expense, $225; Credit Notes Payable, $225.
E. No adjusting entry is required.
Answer: C
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