Pattie's Event Planning Service has just prepared the unadjusted trial balance, which shows the following balances: Salary expense: Debit $8 000 Service revenues: Credit $3 000 Interest expense: 0
On the first day of January, Pattie borrowed $1 800 on a one- year loan payable charging interest at 4% per year. The loan specifies that principal and interest is to be paid in full at the end of the
One- year period. On 30 June, the adjusted trial balance will show what amount for Interest expense?
A)Debit balance of $36
B)Debit balance of $6
C)Debit balance of $72
D)Credit balance of $36

Question

Quizplus · Accepted Answer

Interest expense for six months is calculated as $1,800 * 4% * (6/12) = $36.

Pattie's Event Planning Service Has Just Prepared the Unadjusted Trial