Terrific Tubers Potato Farm needs cash until it sells and delivers its potato crop. Spud National Bank extends a $300,000, 6% loan to Terrific Tubers on December 1, 2018, for which Terrific Tubers signs a note payable. The loan agreement states that all principal and interest will be repaid on March 31, 2019. Terrific Tubers fiscal year ends on December 31.

Select the correct adjusting journal entry required at December 31, 2018 when financial statements are prepared.

Question 28 options:

	Debit Interest Expense $18,000 Credit Interest Payable $18,000
	Debit Interest Expense $1,500 Credit Interest Payable $1,500
	Debit Interest Expense $1,500 Credit Cash $1,500
	Debit Interest Payable $1,500 Credit Interest Expense $1,500