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interest expense and long term notes payable, how do i solve it?
"the long-term note payable bears interest at 12% per year. The unadjusted interest expense account equals the amount paid for the first 11 months of the 2008 fiscal year. the 250$ accrued interest for June has not yet been paid or recorded. (Note: the company the is required to make a $5,000 payment toward the note payable during the 2009 fiscal year.)"
LONG TERM NOTE PAYABLE (CR)= $25,000 INTEREST PAYABLE (CR) = 0 INTEREST EXPENSE (DR) = 2750 there is no "short term note payable" on the given unadjusted trial balance. PLEASE HELP ! |
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Are you just confused over the short-term thing? That's not necessarily an adjusting entry, nor an account. It's something that can just be done that way on the Balance Sheet. If you're doing it manually (even on the computer, like in Excel or whatever), then just remove $5000 from the long-term part and report that as $20,000. Then add a line to the short-term liabilities for "Current portion of a long-term debt" and list as $5000.
If you're working in software that you can't do that yourself (which is fairly common these days), you'd have to make an entry to move it, and you'd have to create the account. If you can't create an account, don't know what to tell you. If you can't, then you shouldn't be expected to do it. |
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