Question: Answer the following question: On September 1, Adele Corp. borrowed $30,000 from their bank, and signed a 5%, 3-month bank loan. Principal and interest are

Answer the following question:

On September 1, Adele Corp. borrowed $30,000 from their bank, and signed a 5%, 3-month bank loan. Principal and interest are due on December 1. If Adele Corp. prepares monthly adjusting entries, which one of the following entries should the company record?

a) On September 30 record a Dr. Interest Expense and Cr. Interest Payable for $1,500.

b) On September 30 record a Dr. Interest Expense and Cr. Interest Payable for $375.

c) On September 30 record a Dr. Interest Expense and Cr. Interest Payable for $125.

d) No entry is recorded until December 1, when the interest is paid to the bank.

e) On September 30 record a Dr. Interest Expense and Cr. Interest Payable for $500.

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