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lara [203]
3 years ago
12

A company borrowed $10,000 from the bank at 5% interest. The loan has been outstanding for 45 days. Demonstrate the required adj

usting entry for this company by completing the following sentence. The required adjusting entry would be to debit the Interest (expense/payable/receivable) account and (debit/credit) the Interest (expense/payable/receivable) account.
Business
1 answer:
PolarNik [594]3 years ago
5 0

Answer:

Explanation:

Outstanding number of days is the period over which the loan balance remains unpaid. Since this loan earns 5% interest, required adjusting entry for this company would be to Debit<em> interest expense</em> <em>account</em> and Credit the interest <em>payable account. </em>It is an accounting requirement that all expenses be debited . On the other hand, interest payable  is the amount that a company owes a lender and is therefore credited as the corresponding journal entry to the interest expense .

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Answer:

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Explanation:

Given

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Cash investment by stockholders will be categorized under financing activities while dividend paid can either be categorized as operating or financing activity.

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