Question

A $ 43 comma 000​,twominus​month,10​%note payable was issued on December​ 1, 2018. What is the amount of interest expense recorded in the year​ 2019? (Round your final answer to the nearest​ dollar.)

Answer 1

Answer:

Preparation of the amount of interest expense recorded in the year​ 2019

Dr Notes Payable 43,000

Dr Interest expense 358.33

($43,000 × 0.1% × 1/12)

Dr Interest Payable 358.33

($43,000 × 0.1% × 1/12)

Cr Cash 43,716.66

Explanation:

Since  $ 43,000​ 2month and 10​%note payable were been  issued on December​ 1, 2018 this means we have to record the transaction by Debiting  Notes Payable 43,000, Debiting Interest expense 358.33 ($43,000 × 0.1% × 1/12) and Debiting Interest Payable 358.33

($43,000 × 0.1% × 1/12) while we Credit Cash with 43,716.66(43,000+358.33+358.33)