Mac,Inc.purchased a truck on October 1,2011 in exchange for a 12-month,9%,$100,000 note.What effect does the October 31,2011 adjusting entry for interest have on the company's total assets?

Question

Quizplus · Accepted Answer

The adjusting entry for interest expense will increase interest payable and interest expense. Interest payable is a liability, so the total assets will not be affected.

Mac,Incpurchased a Truck on October 1,2011 in Exchange for a 12-Month,9%,$100,000