S3-10 (similar to) interest expense for each month is $458. The loan agreement r
ID: 2404194 • Letter: S
Question
S3-10 (similar to) interest expense for each month is $458. The loan agreement requires Resario to pay interest on Resario Restaurant borrowed $110,000 on October 1 by signing a note payable to Region One Bank. The January 2 for October,November and December Read the requirenents 1. Make Resario Travet's adjusãing entry to acorue monthly interest experse at October 31, at November 30, and a December 31 . Date oach ontry and include its explanation (Reoord debits frst, then credts. Select the explanation on the last line of the jounal entry table.) Make the adjusting entry to accrue monthly interest expense for October Requirements ournal Entry Date Accounts and Explanation Debit Credit Oct 31 .Make Resario's adjusting entry to accrue monthly interest expense at October 31, at November 30, and at December 31. Date each entry and include its explanation 2. Post al three entries to the interest Payable account. You do not need to calculate the balance of the account at the end of each month. 3. Record the payment of three months' interest on January 2 Print DoneExplanation / Answer
Requirement: 1
Accounting Equation:
The following is the accounting equation for the adjustment entry of accrued interest expenses:
Assets =Liabilities + Stockholder’s equity-Expenses
$0 =+$458(Interest Payable) -$458(Interest Expense)
Prepare adjusting entry of accrue monthly interest expenses.
Date
Accounts title and explantion
Debit($)
Credit($)
Oct-31
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of october)
Nov-30
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of november)
Dec-31
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of december)
Explanation :
Requirement: 2
Post the adjusting entries in interest payable account.
Interest Payable Account
Date
Details
Credit
0ct-31
Interest expense
$458
Nov-30
Interest expense
$458
Dec-31
Interest expense
$458
Dec-31
Ending balance
$1,374
Requirement: 3
Record the payment of three months interest at January 2.
Accounting equation:
The following is the accounting equation for the payment of accrued interest expense:
Assets = Liabilities + Stockholder’s equity
-$1,374(cash)=-$1,374(Interest Payable)
Prepare journal entry for the payment of accrued interest expense on January 2.
Date
Accounts title and explantion
Debit($)
Credit($)
Jan-02
Interest Payable(L-)
$ 1,374.00
Cash(A-)
$ 1,374.00
(To record the payment of accrued interest )
Explanation:
Date
Accounts title and explantion
Debit($)
Credit($)
Oct-31
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of october)
Nov-30
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of november)
Dec-31
Interest Expense(E-)
$ 458.00
Interest Expenses Payable (L+)
$ 458.00
(To record the amount of accrued interest expenses for the month of december)
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