Account for interest expense. (LO 1, 2)

UMC Company purchased equipment on November 1,2008 , and gave a 3 -month, \(9 \%\) note with a face value of \(\$ 10,000\). How much interest expense will be recognized on the income statement for the year ended December 31, 2008? What effect does this adjustment have on the statement of cash flows for 2008 ? Is this adjustment an accrual or deferral?