The total interest month due on the note at its due

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Unformatted text preview: ntries for “Accrued Expenses” Illustration 3-16 Adjusting entries for accrued expenses Increases (debits) an expense account and Increases (credits) a liability account. Chapter 3-37 LO 6 LO Prepare adjusting entries for accruals. Prepare Adjusting Entries for “Accrued Expenses” Adjusting Entries for “Accrued Expenses” Example: On Oct 1st, Pioneer Advertising signed a $,5000, 3­month note On Oct 1 payable at a rate of 12% per year. The total interest due on the note at its due date is $150 ($5,000 X 12% X 3/12). Show the journal entry to record the borrowing on Oct. 1st. Oct. 1 Cash 5,000 Notes payable 5,000 Cash Debit Notes Payable Credit Debit 5,000 Chapter 3-38 Credit 5,000 LO 6 LO Prepare adjusting entries for accruals. Prepare Adjusting Entries for “Accrued Expenses” Adjusting Entries for “Accrued Expenses” Example: On Oct 1st, Pioneer Advertising signed a $,5000, 3On month note payable at a rate of 12% per year. The total interest month due on the note at its due date is $150 ([$5,000 x 12%] / 12 months). $150 Show the adjusting journal entry required on Oct. 31st. Show the Oct. 31 Interest expense 50 Interest payable Inter...
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This note was uploaded on 01/14/2012 for the course ACCOUNT 102 taught by Professor Adams during the Spring '11 term at Bradford School of Business.

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