contestada

On October 1, 2018, Pennington Company issued a $90,000, 10%, nine-month interest-bearing note.

1) Record the adjusting entry for interest expense at Dec 31, 2018. Also,

2) journalize the payment of the note on July 1, 2019.

Respuesta :

anthougo

1) Recording the adjusting entry for Interest Expense on December 31, 2018, for Pennington Company is as follows:

Adjusting Journal Entry:

December 31, 2018

Debit Interest Expense $2,250

Credit Interest Payable $2,250

  • To accrue interest expense for 3 months.

2) July 1, 2019

Debit Interest Expense $4,500

Credit Interest Payable $4,500

  • To accrue interest expense for 6 months.

Debit 10% Note Payable $90,000

Debit Interest Payable $6,750

Credit Cash $96,750

  • To record the payment of cash for principal and interests.

Transaction Analysis:

October 1, 2018: Cash $90,000 10% Note Payable $90,000

December 31, 2018 Interest Expense $2,250 Interest Payable $2,250

July 1, 2019 Interest Expense $4,500 Interest Payable $4,500

10% Note Payable $90,000 Interest Payable $6,750 Cash $96,750

Thus, the total interest expense for the note issuance for nine months is $6,750 ($90,000 x 10% x 9/12).

Learn more about journalizing transactions at https://brainly.com/question/17201601

#SPJ1

Otras preguntas