Can you tell me how to calculate this amount, $12,375?

a. The long-term debt is payable in annual installments of

$30,000, with the next installment due on July 31.

On that date, Speedy Shipwill also pay one year's interest at 9%.

Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year-end.

Date			Accounts and Explanation	Debit	Credit
(a)			Interest Expense	12,375
			Interest Payable		12,375
			To accrue interest expense at year-end.