On June 1,Edison Company borrowed $27,000 on a one-year Note Payable with an interest rate of 10% per year.It will repay the principal and interest at the end of the one-year period.The company makes accrual adjustments at the end of each month.The company should record interest expense of $2,700 on June 30.

Question

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Interest Expense = ($27,000 × 10%) / 12 = $225

On June 1,Edison Company Borrowed $27,000 on a One-Year Note