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Olegator [25]
3 years ago
14

Uncle Tupelo's Gifts signs a three-month note payable to help finance increases in inventory for the Christmas shopping season.

The note is signed on November 1 in the amount of $75000 with annual interest of 12%. What is the adjusting entry to be made on December 31 for the interest expense accrued to that date, if no entries have been made previously for the interest
Business
1 answer:
ladessa [460]3 years ago
3 0

Answer:

Interest expense --------$1,500

Interest payable-------------- $1,500

Explanation:

Given the following ;

Amount of note signed = $75,000

Annual interest rate = 12% = 0.12

Date signed = November 1

Calculate interest expense to be made in the adjusting entry by December 31 :

NOTE: No entries have been made previously for the interest expense

Monthly Interest = (Amount × rate) ÷ 12

Monthly interest = ($75,000 × 0.12) ÷ 12

Monthly interest = $9000 ÷ 12 = $750

November 1 to December 31 = 2 months

$750 × 2 = $1500

Interest expense = $1,500

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5 0
3 years ago
Joe walks into Best Buy prepared to spend no more than $500 cash on a new computer, but the price turns out to be $600. Joe is t
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Answer:

Irrational decision

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8 0
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True (1)

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2 years ago
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