Question: Interest has accrued on a $20,000, 6% note payable, issued on May 1st for borrowing. Provide the adjusting journal entry that company must make on December 31, 2020, the end of the fiscal year.

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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A Accounts Payable AA Losses due to fire
B Accounts Receivable BB Merchandise Inventory
E Accumulated Depreciation—Equip EE Notes Payable
F Allowance for Doubtful Accounts FF Payroll Tax Expense
G Bad Debt Expense GG Premium on Bonds Payable
H Bonds Payable HH Prepaid Insurance
I Building II Prepaid Rent
J Capital Lease Payable JJ Rent Expense
K Cash KK Rent Revenue
L Cost of Goods Sold LL Retained Earnings
M Depreciation Expense MM Salaries and Wages Expense
N Discount on Bonds Payable NN Salaries and Wages Payable
O Dividends OO Sales Commission Expense
P Equipment PP Sales Commission Payable
Q Fed Income Tax Payable QQ Sales Returns
R Fed Unemployment Tax Payable RR Sales Revenues
S FICA Taxes Payable SS Sales Taxes Payable
T Income Summary TT Service Revenue
U Insurance Expense UU State Income Tax Payable
V Interest Expense VV State Unemployment Tax Payable
W Interest Payable WW Supplies
X Interest Receivable XX Supplies Expense
Y Interest Revenue YY Unearned Rent Revenue
Z Land ZZ Unearned Service Revenue


 
Examole of Journal Entry: K3000D,B2000D,TT5000C
Where K denotes Cash account, 3000 is the amount, D stands for debit, B denotes Accounts Receivable  account, 2000 is the amount, D stands for debit, TT denotes Service Revenues, 5000 is the amount, and C stands for credit.  The letters are in capital. Comma is used to separate the changes in each account. Don’t use dollar sign, decimal point, or space in any place.  If in an entry requires more than one debit or credit accounts, first enter debit accounts in order of dollar amount – large amount to small amount, then the credit accounts in order of dollar amount – large amount to small amount. 
 
Question: Interest has accrued on a $20,000, 6% note payable, issued on May 1st for borrowing. Provide the adjusting journal entry that company must make on December 31, 2020, the end of the fiscal year.

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