Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Company A borrows $100,000 from Company Z on July 1, 2021. The loan is a 1 year loan with repayment due on June 30, 2022.
Company A borrows $100,000 from Company Z on July 1, 2021. The loan is a 1 year loan with repayment due on June 30, 2022. The annual interest rate for the loan is 12%. Assuming the appropriate adjusting entry was made by Company A on December 31, 2021 to record the interest expense for the first 6 months of the loan, what is the entry that Company A makes on June 30, 2022 to reflect the payment to Company Z when the loan becomes due (assume no other entries have been made in 2022) Debit Loan Payable $100,000 Debit Interest Expense $12,000 Credit Cash $112,000 Debit Loan Payable $100.000 Debit Interest Expense $6,000 Debit interest Payable $6,000 Credit Cash $112,000 Debit Loan Payable $100,000 Debit Interest Payable $12,000 Credit Cash $112,000 Debit Loan Payable $100,000 Credit Cash $100,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started