______ On July 1, 2010, Allen Company signed a $100,000, nine-month, 6 percent n

Question

______ On July 1, 2010, Allen Company signed a $100,000, nine-month, 6 percent note payable. At due date, March 31, 2011, the principal and interest will be paid. What is the appropriate adjusting entry at July 31, 2010?
Formula: Principle amount x interest rate x 1/12 = monthly interest
a.Interest Payable $100,000
Interest Expense $100,000
b.Cash $100,000
Notes Payable $100,000
c.Interest Expense $667
Interest Payable $667
d.Interest Expense $500
Interest Payable $500
e.Interest Receivable $500
Interest Revenue $500

Explanation / Answer

The correct entry will be Formula: Principle amount x interest rate x 1/12 = monthly interest 100,000 x 6% x 1/12 = $500 d.Interest Expense $500 Interest Payable $500

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.