To purchase equipment and supplies, Salem Bike Shop, Inc., borrowed $30,000 on J

Question

To purchase equipment and supplies, Salem Bike Shop, Inc., borrowed $30,000 on June 1 by signing a note payable to State One Bank. Interest expense for Salem Bike Shop, Inc., is $250 per month. Journalize an adjusting entry to accrue interest expense at December 31, assuming no other adjusting entries have been made for the year. Post to the two accounts affected by the adjustment Journalize an adjusting entry to accrue interest expense at December 31, assuming no other adjusting entries have been made for the year. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Date Accounts Debit Credit 31 Interest expense Interest payable Dec 29750 29750

Explanation / Answer

Journal Entry Date Account Titles Debit Credit .'31-dec Interest Expense $1,750 Interest Payable ($250*7) $1,750 To Record accrued interestExpense

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