1. On October 1, Steve's Carpet Service borrows $350,000 from First National Bank on a 3 month, $350,000, 8% note. What entry must Steve's Carpet Service make on December 31 before financial statements are prepared? a. Interest Payable 7,000 Interest Expense 7,000 b. Interest Expense 28,000 Interest Payable 28,000 c. Interest Expense 7,000 Interest Payable 7,000 d. Interest Expense 7,000 Notes Payable 7,000 2. On September 1, Joe's Painting Service borrows $150,000 from National Bank on a 4-month, $150,000, 6% note. The entry by Joe's Painting Service to record payment of the note and accrued interest on January 1 is a. Notes Payable 153,000 Cash 153,000 b. Notes Payable 150,000 Interest Payable 3,000 Cash 153,000 c. Notes Payable 150,000 Interest Payable 9,000 Cash 159,000 d. Notes Payable 150,000 Interest Expense 3,000 Cash 153,000 the rachronicler Total receipts for