On October 1, 2007, ABC Company loaned $100,000 in cash to XYZ Company at an interest rate of 12% per year. The note matures in 6 months. What journal entry must XYZ record on December 31, 2007? a. b. c. d. e. Debit Interest Expense and credit Cash for S12,000 Debit Interest Expense and credit Interest Payable for $12,000 Debit Interest Expense and credit Interest Payable for $6,000 Debit Interest Expense and credit Cash for S6,000 None of the above The accountant for the Times Company forgot to make an adjusting entry to record salaries carned but not paid to employees. The effect of this error would be: a. An understatement of net income and an overstatement of liabilities. b. An overstatement of net income and an understatement of liabilities. c. An understatement of net income and liabilities. d. An overstatement of net income and liabilities e. None of the above. The accountant for the Herald Company forgot to make an adjusting entry to record depreciation expense for the year The effect of this error would be a. An overstatement of equity and an understatement of assets. b An understatement of equity and an overstatement of assets. c. An overstatement of equity and assets. d. An understatement of equity and assets. e. None of the above. At the end of the year, the accountant for Metro Inc. failed to record fees carned by the company during the year. The effect of this error would be a. An overstatement of assets and an understatement of net income b An understatement of assets and an overstatement of net income. c. An understatement of assets and net incomc. d. An overstatement of assets and net income. e. None of the above Which adjusting entry l result in a decrease in assets? a. An adjusting entry to record interest that has been incurred b. An adjusting entry to record the expiration of rent c. An adjusting entry to record revenue that is carned d. Alof the above e. None of the above JB Company had net income of $100,000 for the year before adjusting entries. If the following adjustments are necessary, what amount will JB report for net income? Office supplies used, $1,000 Services performed for clients but not recorded, $2,000 Interest accrued on a note payable, $7,000 Insurance expired, S3,000 Two-thirds of a S6,000 cash advance for future services was carned during the year