Julissa Company received a $150,000, one year, 9 percent bank loan on October 31, 2019. Interest is payable at the end of the loan term.
Adelman's adjusting entry at the end of their fiscal year on March 31, 2020 is:

Question

Quizplus · Accepted Answer

Total Interest Expense = ($150,000 x 0.09) = $13,500
Interest Expense for fiscal year = $13,500 x 5/12 = $5,625
Entry March 31, 2020:
Interest Expense $5,625
$\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ Interest Payable $5,625

Julissa Company Received a $150,000, One Year, 9 Percent Bank