1. Accrual Based Accounting Adjusting Journal Entries (AJEs): On August 1^st, 2020, The Androids Dungeon & Baseball Card Shop borrowed $21,000 from the 1^st Bank of Springfield, signing a note payable. This note is due in 5 years and has a 4% annual interest rate. The firm pays interest annually, every July 31^st. The first interest payment is due July 31^st, 202
   1. Record the journal entry The Androids Dungeon would make on August 1^st, 2020, when it initially borrows the $21,000 from the bank.
   2. Record the adjusting entry The Androids Dungeon would make to recognize Interest Expense on December 31^st, 2020. Assume The Androids Dungeon uses an annual accounting period which ends on December 31^st, 2020 and adjusting entries are only made at the end of the annual accounting period on 12/31 (i.e. assume no adjusting entries have been recorded yet for the year).
   3. Calculate the adjusted balances of both the Interest Payable account and the Interest Expense account as of 12/31/2020. Assume the balance of the Interest Payable account and the balance of the Interest Expense account as of 8/1/2020 were both $0 and there are no other transactions.
   4. What if The Androids Dungeon did not make the adjusting entry on 12/31/2020 to recognize Interest Expense? Indicate by how much the year ending 12/31/2020s 1) assets, 2) liabilities, 3) revenues, 4) expenses, 5) net income, 6) retained earnings, and 7) SHE would be either under- or overstated if this adjusting entry were not recorded If no effect, write no effect.
   5. Record the journal entry The Androids Dungeon would make on July 31^st, 2021, when it makes its first annual interest payment to the bank.