Midshipmen Company borrows $10,000 from Falcon Company on July 1, 2012. Midshipmen repays the amount borrowed and

Question:

Midshipmen Company borrows $10,000 from Falcon Company on July 1, 2012. Midshipmen repays the amount borrowed and pays interest of 12% (1%/month) on June 30, 2013.
(1) Record the borrowing for Midshipmen on July 1, 2012.
(2) Record the adjusting entry for Midshipmen on December 31, 2012.
(3) Calculate the 2012 yearend adjusted balances of Interest Payable and Interest Expense (assuming the balance of Interest Payable at the beginning of the year is $0)?