Adjusting Entries for Interest The following note transactions occurred during the year for Towne Company: Nov. 25 Towne issued a 90-day, nine percent note payable for $8.000 to Hyatt Company for merchandise. Dec. 7 Towne signed a 120-day. $30,000 note at the bank at ten percent. Dec. 22 Towne gave Barr, Inc., a $12,000, four percent, 60-day note in payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar. General Journal Description Date Debit Credit Dec.31 Interest Payable Interest Expense Dec.31 To accrue interest expense for note signed on Dec. 7. Dec.31 To accrue interest expense for note on Dec. 22.
Adjusting Entries for Interest The following note transactions occurred during the year for Towne Company: Nov. 25 Towne issued a 90-day, nine percent note payable for $8.000 to Hyatt Company for merchandise. Dec. 7 Towne signed a 120-day. $30,000 note at the bank at ten percent. Dec. 22 Towne gave Barr, Inc., a $12,000, four percent, 60-day note in payment of account. Prepare the general journal entries necessary to adjust the interest accounts at December 31. Use 360 days for calculations and round to the nearest dollar. General Journal Description Date Debit Credit Dec.31 Interest Payable Interest Expense Dec.31 To accrue interest expense for note signed on Dec. 7. Dec.31 To accrue interest expense for note on Dec. 22.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Adjusting Entries for Interest
The following note transactions occurred during the year for Towne Company:
Nov. 25 Towne issued a 90-day, nine percent note payable for $8,000 to Hyatt Company for merchandise.
Dec.
7 Towne signed a 120-day, $30,000 note at the bank at ten percent.
Dec. 22 Towne gave Barr, Inc., a $12,000, four percent, 60-day note in payment of account.
Prepare the general journal entries necessary to adjust the interest accounts at December 31.
Use 360 days for calculations and round to the nearest dollar.
General Journal
Date
Description
Debit
Credit
Dec.31
Interest Payable
Interest Expense
Dec.31
To accrue interest expense for note signed on Dec. 7.
Dec.31
To accrue interest expense for note on Dec. 22.
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