Accrue the interest expense for the mortgage payable at December 31. Simon Co. has not recorded any interest expense since the principal and interest payment on January 31, 2017 (interest rate on the mortgage payable is 7%).

The 7% mortgage payable is secured by a lien on the building. It was issued on February 1, 2012 as partial payment for the building and land. The accrued interest plus $30,000 of the principal is payable each January 31. Payment activity is summarized below:

Balance 2/1/12                                            $350,000

Payments (4 @ $30,000)                               120,000

Balance 12/31/16                                        $230,000

Payment, 1/31/17                                            30,000

Balance, 1/31/17                                         $200,000

Prepare the adjusting end of year journal entry.