Question
On December 1, Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank. The note payable plus interest will not be
On December 1, Casualty Insurance Company borrowed $50,000 at a 6.0% interest rate from One Mutual Bank. The note payable plus interest will not be paid until April 1 of the following year. The company's annual accounting period ends on December 31 and adjustments are only made at year-end. The adjusting entry needed on December 31 is:
No entry required. | ||
Debit Interest Expense, $250; credit Interest Payable, $250. | ||
Debit Interest Expense, $250; credit Note Payable, $250. | ||
Debit Interest Payable, $1,000; credit Interest Expense, $1,000. | ||
Debit Interest Expense, $1,000; credit Interest Payable, $1,000. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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