Question
On September 1 the Jackson Company purchased its building by paying $240,000 in cash and assuming a $960,000 long-term mortgage payable for the balance. The
On September 1 the Jackson Company purchased its building by paying $240,000 in cash and assuming a $960,000 long-term mortgage payable for the balance. The mortgage bears interest at the rate of 9% per annum, payable quarterly on August 31, November 30, February 28, and May 31. Which of the following entries must Jackson make on September 30 to record the accrued interest on this mortgage?
A. Interest Expense 7,200 Interest Payable 7,200
B. Interest Expense 86,400 Interest Payable 86,400
C. Interest Revenue 7,200 Interest Payable 7,200
D. Interest Receivable 7,200 Interest Payable 7,200
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