Nona’s Gelato prepares financial statements on an annual basis and has a December 31, 2023 year-end. As of March 1, 2023, Nona’s Gelato took out a bank loan for $24,000 with an interest rate of 8%. Interest is incurred on a monthly basis and needs to be paid on December 31, 2024. How much does the insurance policy cost per month?
a. How many months of interest expense have been incurred at December 31, 2023?
b. In order to prepare the annual financial statements, record the adjusting journal entry for December 31, 2023.