Bentley Enterprises purchased $8,000 of inventory by issuing a six-month, 7.5% note payable on November 1, 2019. Bentley has a December 31 year end. (7.5% is an annual rate)

1. The amount of accrued interest on December 31, 2019, would be:

A) $200.00.

B) $100.00.

C) $50.00.

D) $300.00.

2. The entry on May 1, 2020, to pay the note payable and interest would include a:

A) debit to Interest Expense of $300.00.

B) debit to Interest Payable of $100.00.

C) credit to Interest Payable of $200.00.

D) credit to Cash of $8,000.00.

3. The amount of interest expense recognized in 2020 would be:

A) $200.00.

B) $50.00.

C) $100.00.

D) $300.00.