- Saved to this PC e Search Help to stay in Protected View Enable Editing 4. Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000,6%, 9-month note. What is the adjusting entry required if Sadowski Brick Company prepares financial statements on June 302 A) Interest Expense 15,000 Interest Payable 15,000 B) Interest Expense 15,000 Cash 15,000 C) Iaterest Payable 15,000 Cash 15,000 D) Interest Payable 15,000 Interest Expense 15,000 5. West County Bank agrees to lend Drake Builders Company $400,000 on January 1 Drake Builders Company signs a $400,000,6%, 6-month note. What entry will Drake Builders Company make to pay off the note and interest at maturity assuming that interest has been accrued to June 302 A) Notes Payable 412,000 Cash 412,000 B) Notes Payable 400,000 Interest Payable 12,000 Cash 412,000 C) Interest Expense 12,000 Notes Payable 400,000 Cash 412,000 D) Interest Payable Notes Payable 400,000 Interest Expense Cash 412,000 6,000 6.000 6. As interest is recorded on an interest-bearing note, the Interest Expense account is A) increased; the Notes Payable account is increased. B) increased; the Notes Payable account is decreased C) increased; the Interest Payable account is increased D) decreased, the Interest Payable account is increased 7. The interest charged on a $300,000 note payable at the rate of 6%, on a 90-day note would be A) $18,000 B) $9,000 C) $4.500 D) $1,500