Adjustment B - Since the matching principle requires that...

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Adjustment B : Mr. Green's $10,000 note payable, which he signed on April 2, carries a 10.2%  interest rate. Interest calculations usually exclude the day that loans occur and include the day that  loans are paid off. Therefore, Mr. Green uses the formula below to calculate how much interest  expense accrued during the final twenty-eight days of April. 
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Unformatted text preview: Since the matching principle requires that expenses be reported in the accounting period to which they apply, Mr. Green makes an adjusting entry to increase (debit) interest expense for $79 and to increase (credit) interest payable for $79....
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This note was uploaded on 11/14/2011 for the course ACCT 1310 taught by Professor Staff during the Fall '10 term at Texas State.

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