Answer:
Debit Interest Payable for $1,500, debit Interest Expense for $750, and credit Cash for $2,250
Explanation:
The journal entry is shown below:
Interest expense A/c Dr $750
Interest payable A/c Dr $1,500
To Cash A/c $2,250
(Being cash is paid on maturity)
The computation is shown below:
For interest payable
= $50,000 × 9% × 4 months ÷ 12 months
= $1,500
The 4 months from September 1 to December 31
For interest expense
= $50,000 ×9% × 2 months ÷ 12 months
= $750
The two months are January to February
And, the cash is $1,500 + $750 = $2,250
