On the first day of January, Harris, Inc. borrowed $2,000 on

On the first day of January, Harris, Inc. borrowed $2,000 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) $70 credit
B) $70 debit
C) $140 credit
D) $140 debit

ANSWER

A .Interest Payable = $2,000 × 7% × 6/12 = $70