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Chapter 3: Q 11SE-1 (page 159)

Resort Travel borrowed \(33,000 on September 1, 2018, by signing a one-year note payable to State One Bank. Resort’s interest expense on the note payable for the remainder of the fiscal year (September through November) is \)355. Requirements 1. Record the adjusting entry to accrue interest expense at November 30, 2018. 2. Post the adjusting entry to the T-accounts of the two accounts affected by the adjustment.

Short Answer

Expert verified

Adjusting entry is as follows:

Date

Accounts and Explanation

Debit

Credit

November 30, 2018

Interest Expense

$355

Interest Payable

$355

To record interest expense

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on Interest Expense

Interest expense refers to the cost of using borrowed funds, that is payable to lender.

02

Explanation on Journal Entry

The interest expense will be recorded by debiting interest expense and crediting interest payable by $355, respectively.

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