West County Bank Agrees to Lend Drake Builders Company $200,000

Multiple Choice

West County Bank agrees to lend Drake Builders Company $200,000 on January 1. Drake Builders Company signs a $200,000, 6%, 6-month note. What is the adjusting entry required if Drake Builders Company prepares financial statements on March 30?

A) Interest Expense 6,000 Interest Payable 6,000
B) Interest Expense 6,000 Cash 6,000
C) Interest Expense 3,000 Interest Payable 3,000
D) Interest Payable 3,000 Interest Expense 3,000