Pharoah Company borrowed $51800 from the bank signing a 6%, 3-month note on September 1. Principal and interest are payable to the bank on December 1. If the company prepares monthly financial statements, the adjustment that the company should make for interest on September 30, would be: O decrease Note Payable, $3108; decrease Cash, $3108. O increase Interest Expense, $3108; increase Interest Payable, $3108. O increase Interest Expense, $259; increase Interest Payable, $259. O increase Cash, $777; increase Interest Payable, $777.

Pharoah Company borrowed $51800 from the bank signing a 6%,3-month note on September 1 . Principal and interest are payable to the bank on Deciember 1. If the comnany prepares monthly financial statements, the adjustment that the company should make for interest on September 30 , would be: decrease Note Payable, $3108, decrease Cash, $3108. increase Interest Expense, \$3108; increase Interest Payable, $3108, increase interest Expense, \$259; increase Interest Piyable. $259. increase Cash, $777 :increase interest Payable, $777