On November 1, Jay Company Loaned an Affiliate $100,000 at a 9.0

Multiple Choice

On November 1, Jay Company loaned an affiliate $100,000 at a 9.0% 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. The adjusting entry needed on December 31 is:

A) Debit Interest Receivable, $750; credit Interest Revenue, $750.
B) Debit Interest Expense, $750; credit Interest Payable, $750.
C) Debit Interest Expense, $1,500; credit Interest Payable, $1,500.
D) Debit Interest Receivable, $2,250; credit Interest Revenue, $2,250.
E) Debit Interest Receivable, $1,500; credit Interest Revenue, $1,500.