Answer:
Credit to Interest Payable of $2,000
Explanation:
Preparation of the adjusting journal entry on December 31, 2018 for Sandra Company's year-end
In a situation where the interest amount has already been accrued but has not yet been paid we going to debit the Interest Expense with amount of $2,000 and credit Interest Payable with the amount of $2,000 which means that
the interest expense amount that has accrued for both the month of November and December 2018 will be calculated as :
Accrued Interest Expense=$200,000 × 0.06 × 2 / 12
Accrued Interest Expense= $2,000
Therefore the the adjusting journal entry on December 31, 2018, Sandra Company's year-end, would include a: CREDIT to Interest Payable of $2,000
