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    bosey's Avatar
    bosey Posts: 7, Reputation: 1
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    #1

    Jun 6, 2006, 07:44 AM
    Adjusting Entries
    Original Journal Entry: Negotiated Bank loan on September 12, in the amount of $20,000. Prepare a journal entry to issue a 60-day, 10% note to the bank for that amount. What would be the interest due on note?

    Adjusting Entry for September 30th - Accrue interest on note payable ($20,000) use a 360-day year). What would be the interest to record under adjustments for month ending September 30th.

    Thank you in advance for you assistance.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Jun 6, 2006, 10:49 PM
    Sept. 12
    Dr. Cash 20,000
    Cr. Notes Payable 20,000

    Sept. 30
    Dr. Int Expense 100
    Cr. Int Payable 100
    20,000 x [.1 x 60/360] x 18/60
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