On December 31,Louis Jeweler's made an adjusting entry to record $4,200 accrued interest payable on its mortgage.On January 10,the mortgage payment was made.This payment included interest charges of $6,300,$2,100 of which were applicable to the period from January 1 through January 10.When recording this mortgage payment,the accountant should:

Question

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The correct entry involves debiting Interest Expense for the interest applicable to the current period (January 1 through January 10, which is $2,100) and debiting Accrued Interest Payable for the interest that was accrued at the end of the previous period ($4,200). This accurately reflects paying off the previously accrued interest and recognizing new interest expense.

On December 31,Louis Jeweler's Made an Adjusting Entry to Record