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On November 1, Alan Company signed a 120-day,12% note payable, with a face value of $9,900. What is the adjusting entry for the accrued Interest at December 31 on the note? (Use 360 days a year.)
Debit interest expense. 1198: credit interest payable, $198.
Debit interest expense. $0; credit interest payable. $0.
Debit interest expense, $132: credit interest payable, $132.
Debit interest expense. $264; credit interest payable. $264.
Debit interest expense. $396: credit interest payable. $396.
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