Question

Quesnel Inc. has a number of outstanding loans. For each of the following situations, record the adjusting journal entry that would be required at year-end to accrue the interest expense. In each case, assume that the year end is December 31:
a. A $100,000 bank loan with an annual interest rate of 5 percent, interest payable on July 31 and January 31.
b. A $25,000 five-year note payable with annual interest of 6 percent per year, payable annually on October 31.
c. An 8 percent, $1,000,000 loan from a shareholder with interest payable quarterly on December 31, March 31, June 30, and September 30.
d. A 7 percent, $700,000 bank loan with interest payable quarterly on January 2, April 2, July 2, and October 2.



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  • CreatedFebruary 26, 2015
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