Question

Note Payable 1 On October 1st, 2019, AMD signed a note payable for $1,000. The note carried a 6% interest rate and was due June 1st, 2020. What journal entry will be required on 12/31/2019?

Answer 1

Credit I'l Show All The Entries To Complete Transaction : Date Accounts Title and Explaination 1/10/2019 Cash Notes Payable Debit 1,000 $ $1,000 (To Record Notes Payable) $ $ 15 12/31/2019 Interest Expense Interest Payable $ 15 (To Record Accrued Interest Expense) 1/6/2020 Notes Payable Interest Payable Interest Expense Cash $ $ $ 1,000 15 25 $1,040 (To Record Payment on Maturity Date) Main Answer: Entry To Record on 12/31/2019: Date Accounts Title and Explaination 12/31/2019 Interest Expense Interest Payable Credit Debit 15 $ $ $ 15 (To Record Accrued Interest Expense) *Accrued Interest Expense : $1,000 x 6% x 3/12 = $15 Note : Please comment down for any further clarifications