How did we get the 120 ?????

21. Mama's Pizza Shoppe borrowed $8,000 at 9% interest on May 1, 2013, with principal and interest due on October 31, 2014. The company's financial year ends June 30, 2013. What adjusting entry would the company record on June 30, 2013? No entry Interest expense Interest payable Interest expense Interest payable d. Prepaid interest Interest payable a b. 240 240 C. 120 120 120 120 A. Option A B. Option B C. Option C D. Option D Accrued interest expense: $8,000 x 9% 2/12 = $120