$3$

On September $1,$ Kennedy Company loaned $$138,000,$ at $13\%$ annual interest, to a customer. Interest and principal will be collected when the loan matures one year from the issue date. Assuming adjustments are only

made at year$-$end, what is the adjusting entry for accruing interest that Kennedy would need to make on December $31,$ the calendar year$-$end?

$1\mathrm{.}5$

points

Multiple Choice

$02$:$26$:$34$

Debit Interest Expense, $$17,940$; credit Interest Payable, $$17,940.$

Debit Interest Receivable, $$5,980$; credit Interest Revenue, $$5,980.$

Debit Interest Expense, $$5,980$; credit Interest Payable, $$5,980.$

Debit Cash, $$5,980$; credit Interest Revenue, $$5,980.$

$$ Debit Interest Receivable, $$17,940$; credit Cash, $$17,940.$