Problem

Accruing interest expense and posting to T-accounts [10 min]Thompson Travel borrowed $68,0...

Accruing interest expense and posting to T-accounts [10 min]

Thompson Travel borrowed $68,000 on October 1, 2012, by signing a one-year note payable to Metro One Bank. Thompson’s interest expense for the remainder of the fiscal year (October through December) is $884.

Requirements

1. Make the adjusting entry to accrue interest expense at December 31, 2012. Date the entry and include its explanation.


2. Post to the T-accounts of the two accounts affected by the adjustment.

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