21schraderlily

27.02.2020 • 

Business

On December 1, Milton Company borrowed $410,000, at 9% annual interest, from the Tennessee National Bank. Interest is paid when the loan matures one year from the issue date. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end?
A. debit Interest Expense, $6150; credit Interest Payable, $6150.
B. debit Interest Expense, $36,900; credit Interest Payable, $36,900.
C. debit Interest Payable, $3075; credit Interest Expense, $3075.
D. debit Interest Expense, $3075; credit Interest Payable, $3075.
E. debit Interest Expense, $3075; credit Cash, $3075.

Ответ:

xdoran

19.01.2022

Business

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D. debit Interest Expense, $3075; credit Interest Payable, $3075.

Explanation:

Interest expense A/c Dr $3,075

             To Interest payable A/c $3,075

(Being accrued interest adjusted)

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest × (number of months ÷ total number of months in a year)

= $410,000 × 9% × (1 months ÷ 12 months)

= $3,075

The one month is calculated from December 1 to December 31

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Ответ:

Issaking0131

25.06.2021

Business

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"The Federal Reserve System, often referred to as the Federal Reserve or simply "the Fed," is the central bank of the United States. It was created by the Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system.

I hope my answer has come to your help. God bless and have a nice day ahead!" ~ Pinkfloyd

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