corker14
Jun 27, 2010, 09:09 AM
I see that many people have posted regarding this specific problem over some time but I haven't been able to find the answer that I am looking for.
For class, we were given an unadjusted trial balance sheet that needed to be extended into a 10 column worksheet. I have created the worksheet but find myself stuck regarding the adjustment for:
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)
I have entered in the adjustment for the $240 for FYE June 2005 and I assume that the $5,000 does not need to be recorded because that will take place in the next fiscal year (unless the company plans to make the payment in the current year). I may be over thinking it, but it just felt like if they mentioned it, I would need to do something with that figure. Is that correct?
For class, we were given an unadjusted trial balance sheet that needed to be extended into a 10 column worksheet. I have created the worksheet but find myself stuck regarding the adjustment for:
h. The long-term note payable bears interest at 1% per month. The unadjusted Interest Expense account equals the amount paid for the first 11 months of the 2005 fiscal year. The $240 accrued interest for June has not yet been paid or recorded. (Note that the company is required to make a $5,000 payment toward the note payable during the 2006 fiscal year.)
I have entered in the adjustment for the $240 for FYE June 2005 and I assume that the $5,000 does not need to be recorded because that will take place in the next fiscal year (unless the company plans to make the payment in the current year). I may be over thinking it, but it just felt like if they mentioned it, I would need to do something with that figure. Is that correct?