A $ 43 comma 000 , twominus month, 10 %note payable was issued on December 1, 2018. What is the amount of interest expense recorded in the year 2019? (Round your final answer to the nearest dollar.)

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Business

Gustavo Stevens

21 February, 08:08

A $ 43 comma 000 , twominus month, 10 %note payable was issued on December 1, 2018. What is the amount of interest expense recorded in the year 2019? (Round your final answer to the nearest dollar.)

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Quinten · Answer 1

Preparation of the amount of interest expense recorded in the year 2019

Dr Notes Payable 43,000

Dr Interest expense 358.33

($43,000 * 0.1% * 1/12)

Dr Interest Payable 358.33

($43,000 * 0.1% * 1/12)

Cr Cash 43,716.66

Explanation:

Since $ 43,000 2month and 10 %note payable were been issued on December 1, 2018 this means we have to record the transaction by Debiting Notes Payable 43,000, Debiting Interest expense 358.33 ($43,000 * 0.1% * 1/12) and Debiting Interest Payable 358.33

($43,000 * 0.1% * 1/12) while we Credit Cash with 43,716.66 (43,000+358.33+358.33)