Interest Payable Accrual Adjustments. Prepare: a.) the initial journal entry, b.) each quarter's Accrual adjusting journal entries, and c.) the year-end cash payment of the full year's interest for the note specified below. 1. On January 1 , the company established a $24,000 note payable with Commerce Bank. The note has a 12% interest rate ( 1% per month, or $240 per month). At the end of each quarter, $720 of interest ( 3 months x$240 ) has accumulated. Payment of a full year of interest will occur on December 31. Journal entry worksheet 456 Record the January 1 entry to open the note with Commerce Bank. Note: Enter debits before credits