Adjusting Entries for Interest
The following note transactions occurred during the year for Towell Company:
Oct. | 25 | Towell issued a 90-day, 9% note payable for $8,000 to Hyatt Company for merchandise. |
Nov. | 7 | Towell signed a 120-day, 10% note at the bank for $12,000. |
Dec. | 22 | Towell gave Barr, Inc., a 60-day, 10%, $16,000 note for payment of account. |
Prepare the general journal entries necessary to adjust the interest accounts at December 31.
Use 360 days for calculations and round to the nearest dollar.
General Journal | |||
---|---|---|---|
Date | Description | Debit | Credit |
Dec.31 | |||
To accrue interest expense for note issued on Oct. 25. | |||
Dec.31 | |||
To accrue interest expense for note signed on Nov. 7. | |||
Dec.31 | |||
To accrue interest expense for note on Dec. 22. |