Bread Basket provides baking supplies to restaurants and grocery stores.On November 1, 2011, Bread Basket signed a €500,000, 6-month note payable.The note requires Bread Basket to pay interest at an annual rate of 12%.Assuming Bread Basket makes the appropriate adjusting entry, what is the impact on its December 31, 2011 statement of financial position?

Question

Quizplus · Accepted Answer

The interest for two months (November and December) is €10,000, which is recorded as an interest payable liability on the statement of financial position.

Bread Basket Provides Baking Supplies to Restaurants and Grocery Stores