Assume a business has an opening balance of $10,000 for a bank loan and $0 for the interest payable for the month of June. Interest on the bank loan is set at 6.60%; one month of interest has accrued. Using the trial balance for June 30, how would the business present this interest accrual adjustment for the notes payable (i.e. bank loan) and related accounts in its worksheet? 

a. Unadjusted Trial Balance: Notes Payable $0 & Interest Payable $0 & Interest Expense $0; Adjustments: Notes Payable $10,000 CR & Interest Payable $55 CR & Interest Expense $55 DR; Adjusted Trial Balance: Notes Payable $10,055 CR & Interest Payable $55 CR & Interest Expense $55 DR

b. Unadjusted Trial Balance: Notes Payable $10,000 CR & Interest Payable $0 & Interest Expense $0; Adjustments: Notes Payable $55 CR & Interest Payable $55 CR & Interest Expense $55 DR; Adjusted Trial Balance: Notes Payable $10,055 CR & Interest Payable $55 CR & Interest Expense $55 DR 

c. Unadjusted Trial Balance: Notes Payable $10,000 CR & Interest Payable $0 & Interest Expense $0; Adjustments: Notes Payable None & Interest Payable $660 CR & Interest Expense $660 DR; Adjusted Trial Balance: Notes Payable

Answer rating: 100% (QA)

The correct answer is b Unadjusted Trial Balance Notes Payable 10000 CR Interest Payable 0 Interest ... View the full answer