BE 13-3 Determining accrued interest . LO13-2 On July 1, Orcas Lab issued a $100,000, 12%, 8-month note. Interest is payable at maturity. What is the amount of interest expense that should be recorded in a year-end adjusting entry if the fiscal year-end is (a) December 31? (b) September 30? Income Statement Should report a 5.5 million loss Balance Sheet Should show a 5.5 million liability