Joyce's Gifts Signs a Three-Month Note Payable to Help Finance $\begin{array} { l } \text { Interest Expense}&1,000 \\ \text {Interest Payable }&&1,000 \\\end{array}$

Multiple Choice

Joyce's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season.The note is signed on November 1 in the amount of $50,000 with annual interest of 12%.What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest?

A) $\begin{array} { l } \text { Interest Expense}&1,000 \\ \text {Interest Payable }&&1,000 \\\end{array}$

B) $\begin{array} { l }\text {Interest Expense }&,1500 \\ \text {Interest Payable }&&1,500 \\\end{array}$

C) $\begin{array} { l } \text { Interest Expense}&1,000 \\ \text { Cash}&&1,000 \\\end{array}$

D) $\begin{array} { l }\text { Interest Expense }&1,000 \\ \text {Note Pavable }&&1,000 \\\end{array}$