Dakota Company received a $25,000, one year, 9 percent bank loan on October 31, 2018. Interest is payable at the end of the loan term. Dakota's adjustment at the end of their fiscal year on March 31, 2019 is to increase Interest Payable and Interest Expense for:

Question

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The interest for 5 months (November through March) on a $25,000 loan at 9% annual interest rate is calculated as follows: $25,000 * 9% * (5/12) = $937.50.

Dakota Company Received a $25,000, One Year, 9 Percent Bank