Interest expense for the period should be recorded by debiting interest expense and crediting interest payable.
Interest expense should be increased, because the cost of interest relates to the current period
1st option
Mackenzie Inc. has a $72,500 note payable at December 31. Interest in the amount of $3,625...
Mackenzie Inc. has a $72,500 note payable at December 31. Interest in the amount of $3,625 has accrued but has not yet been paid. Both the note payable and the accrued interest will become due next year. How will the interest affect the adjustments at the end of the period?
Accrue the interest expense for the mortgage payable at December 31. Simon Co. has not recorded any interest expense since the principal and interest payment on January 31, 2017 (interest rate on the mortgage payable is 7%). The 7% mortgage payable is secured by a lien on the building. It was issued on February 1, 2012 as partial payment for the building and land. The accrued interest plus $30,000 of the principal is payable each January 31. Payment activity is...
a. Salaries Payable. At year-end, salaries expense of $20.500 has been incurred by the company, but is not yet paid to employees. b. Interest Payable. At its December 31 year-end, the company owes $500 of interest on a line of credit loan. That interest will not be paid until sometime in January of the next year. c. Interest Payable. At its December 31 year end, the company holds a mortgage payable that has incurred $1,125 in annual interest that is...
Assessing Financial Statement effects of Adjustments The following information relates to December 31 accounting adjustments for Fulton Fast Print Company. The firmes fiscal year ends on December 31. 1. Weekly salaries for a five-day week 4.320, payable on Fridays December 31 of the current year is a Tuesday 2. Fulton Fast Print has $24,000 of notes payable outstanding at December 31, interest of 200 has accrued on these notes by December 31 but will not be paid until the notes...
Entries for Bonds Payable and Installment Note Transactions The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $7,800,000 of five-year, 9% callable bonds dated July 1, Year 1, at a market (effective) rate of 10%, receiving cash of $7,498,854. Interest is payable semiannually on December 31 and June 30. Oct. 1. Borrowed $170,000 by issuing a 10-year, 8% installment note to Intexicon Bank. The note requires annual payments of...
Assessing Financial Statement Effects of Adjustments The following information relates to December 31 accounting adjustments for Fulton Fast Print Company. The firm's fiscal year ends on December 31. 1. Weekly salaries for a five-day week total $6,480, payable on Fridays. December 31 of the current year is a Tuesday. 2. Fulton Fast Print has $36,000 of notes payable outstanding at December 31. Interest of $360 has accrued on these notes by December 31 but will not be paid until the...
On December 1, Victoria Company... On December 1, Victoria Company signed a 90 day, 7% note payable, with a face value of $8.400 What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)
The following information relates to December 31 adjustments for Best Print, a printing company. The firm's fiscal year ends on December 31. 1. Weekly salaries for a five-day week total $3,000, payable on Fridays. December 31 of the current year is a Tuesday. 2. Best Print has $25,000 of notes payable outstanding at December 31. Interest of $275 has accrued on these notes by December 31, but will not be paid until the notes mature next year. 3. During December,...
Record adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year. a. Salaries Payable. At year-end, salaries expense of $17,500 has been incurred by the company, but is not yet paid to employees. b. Interest Payable. At its December 31 year-end, the company owes $350 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year. c. Interest...
Entries for Bonds Payable and Installment Note Transactions The following transactions were completed by Montague Inc., whose fiscal year is the calendar year: Year 1 July 1. Issued $6,770,000 of five-year, 11% callable bonds dated July 1, Year 1, at a market (effective) rate of 12%, receiving cash of $6,520,861. Interest is payable semiannually on December 31 and June 30. Oct. 1. Borrowed $310,000 by issuing a 10-year, 7% installment note to Intexicon Bank. The note requires annual payments of...