When a corporation pays a note payable and interest, Question 19 options: the cash account will be debited the interest expense account will be decreased assets and shareholders' equity would both increase the notes payable account and interest expense account will both be debited. Question 20 (1 point) Listen On November 1, Y4, Milton Corp. purchased equipment by signing a 6-month, 4% note for $180,000. The December 31, Y4, adjusting entry required in connection with this note is Question 20 options: debit Interest Expense and credit Interest Payable, $1,200. debit Interest Expense and credit Interest Payable, $7,200 debit Interest Expense and credit Cash, $1,200. debit Interest Expense and credit Interest Payable, $3,600