On September 1, Starr Guitar Corp. borrowed $24,000 from their bank, and signed a 8%, 3-month bank loan. Principal and interest are due on December 1. If Starr prepares monthly financial statements, the adjusting entry that they should prepare for interest on September 30 would be (a) debit Interest Expense, $160; credit Interest Payable, $160. 

(b) debit Interest Expense, $1,920; credit Interest Payable, $1,920. 

(c) debit Bank Loan Payable, $480; credit Cash, $480. 

(d) debit Cash, $24,000; credit Bank Loan Payable, $24,000. 

(e) None of the above.

Answer rating: 100% (QA)

The answer for this is b debit Interest Expense 192... View the full answer