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On August 1, 20x2, Tori's Toys borrowed $8,000 at 9% interest. Principal and interest are due on January 31, 20x3. The company's fiscal year ends
On August 1, 20x2, Tori's Toys borrowed $8,000 at 9% interest. Principal and interest are due on January 31, 20x3. The company's fiscal year ends September 30, 20x2. What adjusting entry is necessary on September 30, 20x2?
Prepaid interest 120Interest payable 120
No entry.
Interest expense 240Interest payable 240
Interest expense 120Interest payable 120
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