A company borrowed $100,000 at 6% interest on September 1,2019.Assuming adjusting entries have not been made during the year,the entry to record interest accrued on December 31,2019 would include a debit to interest expense and a credit to interest payable for $2,000.

Question

Quizplus · Accepted Answer

The interest accrued for four months (September-December) is calculated as $100,000 x 6% x (4/12) = $2,000. Therefore, the entry to record this would be a debit to interest expense and a credit to interest payable for $2,000.

A Company Borrowed $100,000 at 6% Interest on September 1,2019