Question: Interest has accrued on a $20,000, 6% note payable, issued on May 1st for borrowing. Provide the adjusting journal entry that company must make on December 31, 2020, the end of the fiscal year.
| A | Accounts Payable | AA | Losses due to fire |
| B | BB | Merchandise Inventory | |
| E | EE | Notes Payable | |
| F | Allowance for Doubtful Accounts | FF | Payroll Tax Expense |
| G | GG | Premium on Bonds Payable | |
| H | Bonds Payable | HH | Prepaid Insurance |
| I | Building | II | Prepaid Rent |
| J | Capital Lease Payable | JJ | Rent Expense |
| K | Cash | KK | Rent Revenue |
| L | Cost of Goods Sold | LL | |
| M | Depreciation Expense | MM | Salaries and Wages Expense |
| N | Discount on Bonds Payable | NN | Salaries and Wages Payable |
| O | Dividends | OO | Sales Commission Expense |
| P | Equipment | PP | Sales Commission Payable |
| Q | Fed Income Tax Payable | Sales Returns | |
| R | Fed |
RR | Sales Revenues |
| S | FICA Taxes Payable | SS | Sales Taxes Payable |
| T | Income Summary | TT | Service Revenue |
| U | Insurance Expense | UU | State Income Tax Payable |
| V | Interest Expense | VV | State Unemployment Tax Payable |
| W | Interest Payable | WW | Supplies |
| X | Interest Receivable | XX | Supplies Expense |
| Y | Interest Revenue | YY | Unearned Rent Revenue |
| Z | Land | ZZ | Unearned Service Revenue |
Examole of
Where K denotes Cash account, 3000 is the amount, D stands for debit, B denotes Accounts Receivable account, 2000 is the amount, D stands for debit, TT denotes Service Revenues, 5000 is the amount, and C stands for credit. The letters are in capital. Comma is used to separate the changes in each account. Don’t use dollar sign, decimal point, or space in any place. If in an entry requires more than one debit or credit accounts, first enter debit accounts in order of dollar amount – large amount to small amount, then the credit accounts in order of dollar amount – large amount to small amount.
Question: Interest has accrued on a $20,000, 6% note payable, issued on May 1st for borrowing. Provide the
Step by step
Solved in 2 steps
