On October 9 " the cornpany borrows $100,000 from a local bank for nine montha. A nole is signed with principal and 5% imerest to be paid when the nole matures next year. A note payable was recognized on October 1 ti, and no other entries regarding this transaction were made unti December 31 st. 11. In the adusting entry recorded on December 31 t determine the amount of interest expense. Ithat should be reported. 12. What etfect would failure to record the adjusting entry for this note payable have on the financial stalement items? A. would cause it to be overstated B. would cause it to be understatod C. would have no effect