Quiz: Quiz #8 (Ch 9 Current and Long Term Liabilities) Time Remaining: 00:14:15
ID: 2336831 • Letter: Q
Question
Quiz: Quiz #8 (Ch 9 Current and Long Term Liabilities) Time Remaining: 00:14:15 Su This Question: 2 pts 5 of 5 (4 complete) This Quiz: 10 pts possible On August 31, 2018, Freemont Co. purchased $18.000 of inventory with a one-year. 8 percent note payable. Journalize the following for the company 1. Accrual of interest expense on December 31,2018 2. Payment of the note plus interest on August 31, 2019 1. Jourmalize the accrual of interest expense on December 31, 2018. (Record debits first, then credits. Exclude explanations from any joumal entries.) Journal Entry Accounts Date Debit Credit Dec 31 2. Jounalize the payment of the note plus intorest on August 31, 2019. (Record debits first, then credits. Exclude explanations from any journal entries.) Journal Entry Accounts Date Debit Credit Aug 31 Choose from any list or enter any number in the input fields and then continue to the next question.Explanation / Answer
1. Amount of interest expense accrued on December 31, 2018 = $18,000*8%*4/12 = 480. (This is because 1st September to 31st December is 4 months)
The journal entry will be:
2. Interest amount for the period 1st January 2019 to August 31, 2019 = 8% of 18,000*8/12 = 960
Thus the journal entry will be:
Date Accounts Debit Credit 31-Dec-18 Interest expense 480.00 Interest payable 480.00Related Questions
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