Espinosa, Inc., gave a creditor a 90-day, 8% note payable for $50,000 on December 16. No payments were made in December.

a. Prepare the entry Espinosa must make at December 31. (Use a 365-day year.)

Do not round intermediate calculations. Round the final answer to the nearest whole dollar.

	Account	Debit	Credit
	CashPrepaid interestInterest payableNote payableInterest expense		Answer
	CashPrepaid interestInterest payableNote payableInterest expense		Answer
	To record adjustment at December 31.

b. Post the journal entries from a. to the T-accounts below.

Enter your answers in the first open field of the appropriate column in each account.

Cash
	Answer	Answer

Interest payable
	Answer	Answer

Note payable
	Answer	Answer

Interest expense
	Answer	Answer