1)

Baden Industries borrows $20000 at 7% annual interest for six months on October 1^st, 2017. Which is the appropriate entry to accrue interest if Baden employs a December 31^st, 2017, fiscal year?

A)Interest Expense $350

Interest Payable $350

B)Interest Expense $1400

Interest Payable $1400

C)Interest Expense $350

Notes Payable $350

D)Notes Payable $1400

Interest Payable $1400

2)

Nacron Company borrowed $15000 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjusting entry that the company should make for interest on September 30, would be:

A)debit Cash, $75; credit Interest Payable, $75.

B)debit Interest Expense, $900; credit Interest Payable, $900.

C)debit Note Payable, $900; credit Cash, $900.

D)debit Interest Expense, $75; credit Interest Payable, $75.