Shamrock Industries borrows $21600 at 5% annual interest for six months on October 1, 2022. Which is the appropriate entry to accrue interest if Shamrock employs December 31, 2022, fiscal year? (Pick one of the answers and explain why that is the answer.) Answers: 1. Dr Notes Payable $1080 Cr Interest Payable $1080 2. Dr Interest Expense $270 Cr Notes Payable $270 3. Dr Interest Expense $270 Cr Interest Payable $270 4. Dr Interest Expense $1080 Cr Interest Payable $1080
Shamrock Industries borrows $21600 at 5% annual interest for six months on October 1, 2022. Which is the appropriate entry to accrue interest if Shamrock employs December 31, 2022, fiscal year? (Pick one of the answers and explain why that is the answer.) Answers: 1. Dr Notes Payable $1080 Cr Interest Payable $1080 2. Dr Interest Expense $270 Cr Notes Payable $270 3. Dr Interest Expense $270 Cr Interest Payable $270 4. Dr Interest Expense $1080 Cr Interest Payable $1080
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 61P
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Question
Shamrock Industries borrows $21600 at 5% annual interest for six months on October 1, 2022. Which is the appropriate entry to accrue interest if Shamrock employs December 31, 2022, fiscal year? (Pick one of the answers and explain why that is the answer.)
Answers:
1. Dr Notes Payable $1080 |
|
2. Dr Interest Expense $270 |
|
3. Dr Interest Expense $270 |
|
4. Dr Interest Expense $1080 |
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