On September 1s* the company borrows $300,000 from a local bank for nine months. A note is signed with principal and 4.25% interest to be paid when the note matures next year. A note payable was recognized on September 1st and no other entries regarding this transaction were made until December 31st. 11. $ that should be reported. In the adjusting entry recorded on December 31st determine the amount of interest expense 12. What effect would failure to record the adjusting entry for this note payable have on the financial statement items? A. would cause it to be overstated B. would cause it to be understated C.would have no effect Stockholders' Equity Expenses Net income Liabilities Revenue Assets Use the following to answer questions 13 -14 The company incurs employee salaries of $20,000 for the last week of December which will be paid on January 5th 13. Record the adjusting entry on December 31st related to the employee salaries Debit Credit Account 14. $ #13 is not recorded (if lower put "-" in front of your answer). Indicate by how much net income in the income statement is higher or lower if the adjustment in