**Educational Website Transcription:**---## Accounting Exercise: Adjusting Journal Entries### Knowledge Check 01Carboy, Inc. has a December 31 year-end. On November 1, Year 1, the company borrows $120,000 from Third National Bank. The annual interest rate is 9%. The note is due in one year on October 31, Year 2. Interest is payable at maturity on October 31, Year 2.**Task:** Prepare the adjusting entry dated December 31, Year 1.**Instruction:** If no entry is required for a transaction/event, select "No journal entry required" in the first account field.### Journal Entry Worksheet**Requirement:** Record the accrued interest at December 31, Year 1, on the $120,000 note payable.**Note:** Enter debits before credits.#### Journal Entry Table| Date | General Journal | Debit | Credit ||------------|------------------------|-------|--------|| December 31| | | |**Buttons:**- **Record entry**- **Clear entry**- **View general journal****Navigation:**- Page 5 of 13---This exercise focuses on calculating and recording accrued interest in an accounting context. It emphasizes the importance of proper year-end adjustments in accurate financial reporting.

Interest due on payable for December 31 Year 1 = $120,000 * 9% * 2/12 = $1,800

Knowledge Check 01 Carboy, Inc., has a December 31 year-end. On November 1, Year 1, the company borrows $120,000 from Third National Bank. The annual interest rate is 9%. The note is due in one year on October 31, Year 2. Interest is payable at maturity on October 31, Year 2. Prepare the adjusting entry dated December 31, Year 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Knowledge Check 01 Carboy, Inc., has a December 31 year-end. On November 1, Year 1, the company borrows $120,000 from Third National Bank. The annual interest rate is 9%. The note is due in one year on October 31, Year 2. Interest is payable at maturity on October 31, Year 2. Prepare the adjusting entry dated December 31, Year 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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