ezto mheducation comhm tpx connect ACCOUNTING Ch 13 Homework

ezto mheducation com/hm tpx connect. ACCOUNTING Ch. 13 Homework KQues 10.00 points On July 1, Orcas Lab issued a $315,000, 10% 8-month note Interests payable at matunty. What is the amount of interest expense that should be recorded in a year end adjusting entry if the fiscal year end is (a) December 31? (b) September 30? December 31 September 30 References eBook & Resources Worksheet Difficulty 1 Easy

Solution

(a) December 31:-

Note is issued on July 1 and interest expenses upto December 31 will be of 6 months.

Therefore, interest expense to be recorded on December 31 = 315,000×10%×6/12 = $15,750

(b) September 30:-

Note is issued on July 1 and interest expense upto September 30 will be of 3 months.

Therefore, interest expense to be recorded on September 30 = 315,000×10%×3/12 = $7,875

December 31	$15,750
September 30	$7,875