On November 1, Alan Company signed a 120-day, 9% note payable, with a face value of $25,200. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Multiple Choice

• Debit interest payable, $252; credit interest expense, $252.

• Debit Interest Payable, $756; credit Interest Expense, $756.

• Debit Interest Expense, $378; credit Interest Payable, $378.

• No adjusting entry is required.

• Debit Interest Expense, $504; credit Interest Payable, $504.