Edmond Office Equipment borrowed $10,000 at 10% interest on July 1. Principal and interest are due on December 31. The company's fiscal year ends on October 31. What adjusting entry should be made on that date?
A) No entry
B) Interest Expense 500 Interest Payable 500
C) Interest Expense 333 Interest Payable 333
D) Prepaid Interest 333 Interest Payable 333
Answer: C
Business
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