Question

Question 5 0.6 points Save Answer Moss County Bank agrees to lend the Sadowski Brick Company $500,000 on January 1. Sadowski Brick Company signs a $500,000, 6%, 12-month note. What is the adjusting entry required if Sadowski Brick Company prepares financial statements on June 302 Dr.Interest Expense.... 15,000 Cr Interest Payable.... 15,000 Dr.Interest Expense....... ... 15,000 CrCash................................. 15,000 Dr. Interest Payable... 15,000 C.Cash... 15,000 Dr. Interest Payable.......... 15,000 Crinterest Expense 15,000

Answer 1

OPTION:

Dr. interest expense................................15000

Cr. interest payable..................................15000

EXPLANATION:

On june 30, company needs to account for the accrued interest expenses by charging it to profit & loss statement as “interest expenses”. As these interest is not paid yet, a liability account is credited named “interest payable”