Answered: On November 1, Alan Company signed a…

On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $19,800. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 1CE

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Question

On November 1, Alan Company signed a 120-day, 12% note payable, with a face value of $19,800. What is the adjusting entry for the accrued interest at December 31 on the note? (Use 360 days a year.)

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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