On November 1. Carter Company signed $9.000 4-month 10% note payable, with the p

Question

On November 1. Carter Company signed $9.000 4-month 10% note payable, with the principle pius interest due on March I of the following year. What is the adjusting entry for the accrued interest at December 31 on the note? Debit interest expense. SO; credit interest payable. SO. Debit interest expense. $100. credit interest payable. $100. dtoebit interest expense, $150; credit interest payable. $150. Debit interest expense. S200; credit interest payable, $200. Debit interest expense. S300; credit interest payable. $300 On November 1. Carter Company signed a S9.000 4-month 10% note payable, with the principle plus interest due on March 1 of the following year. What is the journal entry as of March 1 to record the payment of the note?

Explanation / Answer

8)

9 Total interest of note = [ $ 5,000 x 0.06 x (90/360) ] = $ 75

(1/3) of that amount is accrued on Dec. 31 since the note was signed on Dec. 1

B. $ 25

9)

Debit interest expense, $150; credit interest payable, $150.

Calculated as under

$9,000 X 10% / 360 X 60

=150

So the anwer is

=Debit interest expense, $150; credit interest payable, $150.

10)

Based on the statement above , s the amount the company will pay for the note at maturity is as under

$9,300

Calculated as under

$9,000 + ($9,000 X 10% / 360 X 120)

=9300

B) notes payable 9000

Interest EXp 300

To cash 9300

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