Please Explain why # 1 is the right answer.

Joyce's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season. The note is signed on November 1 in the amount of $50,000 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

1)

Interest Expense

1,000

Interest Payable

1,000

2)

Interest Expense

1,000

Cash

1,000

3)

Interest Expense

1,500

Interest Payable

1,500

4)

Interest Expense

1,000

Note Payable

1,000

Explain why the answer is # 3

A worksheet can be thought of as a(n)

1)	part of the journal.

2)	part of the general ledger.

3)	optional device used by accountants.

4)	permanent accounting record.