Help ASAP Please
Ans:
1) Increase
2) Interest Expense
3) Interest Payable
Explanation:
1) When computer system is purchased, asset is increased i.e. worth is increase and journal entry will be as follows:
Date | Account Name | Debit | Credit |
1. | Computer System | $ 19,000 | |
To Cash | $4000 | ||
To Note Payable | $15,000 |
2) At the end of year, adjusting entry is made to record interest expense ( interest is accrued but not paid) and liabity to show to due interest payment.
Date | Account Name | Debit | Credit |
2. | Interest Expense | XX | |
To Interest Payable | XX | ||
( Since data is not given regarding interest percentage so we can not calculate the amount.) |
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