Riche Bank agrees to lend $38,000 on August 1, 2019, if Brown Co. signs a $38,000, 8.75%,

six-month note maturing on February 1.

Prepare the adjusting entry on December 31, assuming monthly adjusting entries have not been made.

Group of answer choices

Interest Expense-debit 1,385.42

Interest Expense-credit 1,385.42

Interest payable-debit 1,385.42

Interest payable-credit 1,385.42

Interest Expense-debit 1,108.33

Interest Expense-debit 1,662.50

Interest payable-credit 1,108.33

Interest payable-credit 1,662.50

Interest Expense-credit 1,108.33

Interest Expense-credit 1,662.50

Interest payable-debit 1,108.33

Interest payable-debit 1,662.50

Riche Bank agrees to lend $38,000 on August 1, 2019, if Brown Co. signs a $38,000, 8.75%,

six-month note maturing on February 1.

Prepare the adjusting entry on December 31, assuming monthly adjusting entries have not been made.