On 1 September Carlson Ltd borrowed $10,000 from
the bank for three months at the annual interest rate of 9%. Principal and
interest are payable to the bank on 1 December. If the company prepares monthly
financial statements, the adjusting entry that the company should make for
interest on 30 September, would be:

Question

Accepted Answer

Debit (increase) Interest expense by $75 and credit (increase) Interest
payable by $75

Answer

Debit (increase) Interest expense by $225 and credit (increase) Interest
payable by $225

Answer

Debit (increase) Interest expense by $900 and credit (increase) Interest
payable by $900

Answer

Debit (increase) Interest expense by $300 and credit (increase) Interest
payable by $300

Crowdly

On 1 September Carlson Ltd borrowed $10,000 from the bank for three months at th...

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