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NEED HELP WITH ACCOUNTING!!!! PLZ?
Canney Company borrows $75,972 on July 1 from the bank by signing a $75,972, 9%, 1-year note payable. Prepare the journal entries to record (a) the proceeds of the note and (b) accrued interest at December 31, assuming adjusting entries are made only at the end of the year.
2 Answers
- JKRBLv 79 years agoFavorite Answer
(a) the proceeds of the note
Dr Cash 75,972
Cr Notes Payable 75972
(b) accrued interest at December 31,
Six months interest has accrued
75,972 x 9% x 6/12 = $3,419 (rounded) accrued interest
Dr Interest Expense 3,419
Cr Interest Payable 3,419
Source(s): Accounting Fan - VampireDogLv 69 years ago
debit cash for amount of loan
credit loan payable for same amount
(first take .09 times the amount of loan times .5 to get the amount of interest accrued in one half year)
debit interest expense for the interest accrued
credit interest payable for the same amount
