On the First Day of January, Builders, Inc

Multiple Choice

On the first day of January, Builders, Inc. borrowed $1,000 on a one-year note payable bearing interest at 7% per year. The note specifies that principal and interest must be paid in full at the end of the one-year period. On June 30, the adjusted trial balance will show Interest Payable of ________.

A) $35 credit
B) $35 debit
C) $70 credit
D) $70 debit