QUESTION 13 ABC Co borrowed $80,000 on July 1, 20x1, signing a note payable bearing interest at 3% per year. The note payable will be paid off with interest on December 1, 20X1. ABC Co.'s year-end is December 31 each year. If ABC Co. adjusts its books monthly, what adjusting entry is needed on August 31, 20X1? a. Debit Interest expense....................200 Credit Cash 200 400 b. Debit interest expense Credit Interest payable..... .. O 200 Debit: Interest expense Credit Interest payable 2.400 d. Debit Interest expense Credit. Interest payable