On November 1, Jovel Company Loaned Another Company $100,000 at a 6.0

Multiple Choice

On November 1, Jovel Company loaned another company $100,000 at a 6.0% interest rate. The note receivable plus interest will not be collected until March 1 of the following year. The company's annual accounting period ends on December 31, and adjustments are only made at year-end. The adjusting entry needed on December 31 is:

A) Debit Interest Receivable, $500; credit Interest Revenue, $500.
B) Debit Interest Receivable, $1,000; credit Interest Revenue, $1,000.
C) No entry required.
D) Debit Interest Expense, $1,000; credit Note Payable, $1,000.
E) Debit Interest Expense, $5,000; credit Interest Payable, $5,000.