On May 1, 2021, Townsley borrowed $250,000 from Prime Bank by signing a three-year, 6% note...
On May 1, 2021, Townsley borrowed $250,000 from Prime Bank by signing a three-year, 6% note payable. Interest is due each May 1. What adjusting entry, if any, should Townsley record on December 31, 2021?
Homework Answers
Adjusting entry
| Interest expense | $10,000 | |
| Interest payable | $10,000 |
($250,000×6%×8/12 =$10,000)
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