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 note payable bearing interest at 4% per year.The note specifies that principal and interest is to be paid in full at the end of the one-year period.On June 30,the adjusted trial balance will show what amount for Interest expense?
A) Debit balance of $36
B) Credit balance of $36
C) Debit balance of $72
D) Debit balance of $6

Question

Quizplus · Accepted Answer

Interest expense for six months (January to June) on a $1,800 note at 4% annual interest rate is calculated as follows: $ $1,800 \times 4\% \times \frac{6}{12} = $36 $. This amount represents the interest expense for half a year and would be recorded as a debit balance.

Pattie's Event Planning Service Has Just Prepared the Unadjusted Trial $8,000\$ 8,000$8,000

Pattie's Event Planning Service Has Just Prepared the Unadjusted Trial $\$ 8,000$