Fly Away Travel borrowed $26,000 on August 1, 2016, by signing a one-year note payable to Region One Bank. Fly Away’s interest expense on the note payable for the remainder of the fiscal year (August through October) is $494.

Requirements

1. Record the adjusting entry to accrue interest expense at October 31, 2016.

2. Post the adjusting entry to the T-accounts of the two accounts affected by the adjustment.