On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on March 1, 2022, Daylight Donuts would: (Do not round your intermediate calculations.)

Question

Caesar

Business

8 January, 11:01

On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts records the appropriate adjusting entry for the note on December 31, 2021. In recording the payment of the note plus accrued interest at maturity on March 1, 2022, Daylight Donuts would: (Do not round your intermediate calculations.)

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Answers (1)

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Ava Zavala · Answer 1

Debit interest expense with $4,500

Explanation:

The formula below can be used to calculate Daylight Donuts accrued interest maturity on March 01, 2022.

Interest expense = Amount note payable * Interest rate * [Months/12]

Interest expense = $100,000 * 9% * [6/12]

= $100,000 * 0.09 * 0.5

=$4,500