On November 1, Greenfield Corporation Borrowed $55,000 from a Bank

Multiple Choice

On November 1, Greenfield Corporation borrowed $55,000 from a bank and signed a 12%, 90-day note payable in the amount of $55,000. If you assume 360 days in year, the November 30 adjustment will include:

A) an increase in Discount on Notes Payable, $1,100 and an increase in Interest Payable, $1,100.
B) an increase in Interest Expense, $550 and an increase in Interest Payable, $550.
C) an increase in Interest Expense, $550 and an increase in Notes Payable, $550.
D) an increase in Interest Expense, $550 and a decrease in Cash, $550.