Prepare the journal entry to record the accrual of interest and the premium amortization on December 31, 2022. (Credit account t

Question

wolverine [178]

1 year ago

11

Prepare the journal entry to record the accrual of interest and the premium amortization on December 31, 2022. (Credit account t

itles are automatically indented when amount is entered. Do not indent manually.)

Business

1 answer:

vesna_86 [32] · Answer 1 · 2023-08-10T19:52:48+03:00

The journal entry to record the accrual of interest includes:

Dr. Interest Expense $5,000
Cr. Interest Payable $5,000

<h3>What is an accrual of interest?</h3>

This mean the interest which has been incurred for specific date on a loan but has not yet been paid out.

Here, the Accrued interest expense on 12/31/15 is paid on 1/1/16.

Based on the calculation, the journal entry to record the accrual of interest includes a Debit to Interest Expense for $5,000 and a Credit to Interest Payable for $5,000.

Missing words "On January 1, 2015, Candlestick, Inc. issues $100,000, five-year, 10% bonds at 100 (100% of face value). Assume that interest is payable semiannually on January 1 and July 1."