Aug.

1

Great Adventures obtains a $39,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31.

Interest expense on the $39,000 loan obtained from the city council on August 1 should be recorded.

Prepare the adjusting entry for interest.

General Jorunal

Dec 31, 2018 Interest Expense ______

Interest payable _______