[roxy911]

Brothers Mike and Tim began operations of their tool and die shop on January 1, 2011. The annual reporting period ends December 31.

Transaction during 2012:
a) Borrowed $12,000 cash on a five year, 10 percent note payable, date March 1, 2012.
What would my journal entry for the interest on the note payable?

I have tried 12,000 x .10 % / by 10 months, 9 months the whole year
I've tried all kinds of different numbers and combos but the answer is always wrong.

What am I not getting?

If someone could just help me rationalize through this it would really help.
This homework is due tomorrow... and I can't complete the rest of my financial statements without this piece of info.

Thank you for your help

[pready]

This has been answered on another post.

[willowsunstar]

Try using this cheat sheet I found for T-account placement. It really helps with these kinds of problems.

http://college.cengage.com/accounting/mcquaig/college_acc/8e/students/student_resources/account_transactions/placement.pdf