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16 August, 02:40

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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  1. 16 August, 02:44
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    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)
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