On the attached problem. Calculate the 2021 year-end adjusted balances of Interest Payable and Interest Expense (assuming the balance of interest Payable at the beginning of the year is $0). Are these numbers the $990 for both and if so is one of the numbers negative? Midshipmen Company borrows $16,500 from Falcon Company on July 1, 2021.Midshipmen repays the amount borrowed and pays interest of 12% (1%/month) onJune 30, 2022.Required:1. 1.&2. Record the necessary entries in the Journal Entry Worksheet below.2.3. Calculate the 2021 year-end adjusted balances of Interest Payable andInterest Expense (assuming the balance of Interest Payable at the beginning ofthe year is $0).

Answered: On the attached problem. Calculate the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On the attached problem. Calculate the 2021 year-end adjusted balances of Interest Payable and Interest Expense (assuming the balance of interest Payable at the beginning of the year is $0). Are these numbers the $990 for both and if so is one of the numbers negative?

Midshipmen Company borrows $16,500 from Falcon Company on July 1, 2021.
Midshipmen repays the amount borrowed and pays interest of 12% (1%/month) on
June 30, 2022.
Required:
1. 1.&2. Record the necessary entries in the Journal Entry Worksheet below.
2.3. Calculate the 2021 year-end adjusted balances of Interest Payable and
Interest Expense (assuming the balance of Interest Payable at the beginning of
the year is $0).

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Step 1 Introduction

The interest payable is the amount of the interest due for payment but not yet paid. The interest payable is recorded as current liabilities in the balance sheet.

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