On October 1, 2020, Peridot Ltd. borrowed $150,000 from a local bank by signing a four-month, 5% interest-bearing note, with interest repaid upon maturity. Assuming Peridot has a December 31 year end, the adjusting entry required for the note at year end will include a:

Question 1 options:

debit to Interest Payable of $625

credit to Interest Payable of $1,875

debit to Interest Expense of $2,500

credit to Note Payable of $150,000