On september 1, ABC company borrowed $66,000 on a 6%, 9 month note payable to XY

Question

On september 1, ABC company borrowed $66,000 on a 6%, 9 month note payable to XYZ National Bank. Given no previous adjusting entries have been recorded, ABC's adjusting entry four months later at December 31 would include a: A) debit to interest expense of $990 B) debit to interest expense of $1,320 C) debit to interest expense of $3,960 D) debit to interest expense of $2,970 On september 1, ABC company borrowed $66,000 on a 6%, 9 month note payable to XYZ National Bank. Given no previous adjusting entries have been recorded, ABC's adjusting entry four months later at December 31 would include a: A) debit to interest expense of $990 B) debit to interest expense of $1,320 C) debit to interest expense of $3,960 D) debit to interest expense of $2,970 A) debit to interest expense of $990 B) debit to interest expense of $1,320 C) debit to interest expense of $3,960 D) debit to interest expense of $2,970

Explanation / Answer

Interest on notes payable for 4months = $66,000 @6% *9/12 * 4/9 = $1,320

Entry Debit interest expense $1,320

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

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