How do I interpret after mathematically solving what is being communicated in the following sentences? It is because I need to make adjusting journal entries using the information found in the two sentences.

Financing:

6% interest note payable was made on January 31, 2017, and is due February 1, 2019.

5-year loan was made on June 1, 2017. Terms are 7.5% annual rate, interest only until due date.

Debit Credit

Dec. 31, 2016 Interest Expense (E+) ?

Interest Payable (L-) ?

Prompt: Specifically, the following critical elements must be addressed: 1. Demonstrate the year-end adjustment process. -A. Prepare the adjusting journal entries in the Adjusting Entries tab in the provided workbook. B. Transfer the values from the Adjusting Entries tab to the proper cells of the Adjusting Entries columns in the Worksheet tab. Scenario for adjusting entries: Year end is December 31, 2017. Peyton Baking Company uses the following accounting practices: V. Inventory: Periodic, FIFO for both baking and merchandise o Baking supplies: $27,850 ending inventory Equipment: Straight line method used for equipment Mixing machine: $5,000 initial cost, $500 salvage value, 3rd year of use of 7 total ($642.86 per year) o Ovens: $8,000 initial cost, $1,000 salvage value, 3rd year of use of 7 total ($1,000 per year) Other depreciable equipment: $4,000 initial cost, $o salvage value, 1st year of use of 4 total ($1,000 per year) o Bakery Leasehold Improvements: $10,000, 2nd year of use ($2,000 per year) o Trademark for company name: Initial cost, $2,300, 3rd year of use Office supplies: Periodic, FIFO. Ending balance is $250. Pay period is every 2 weeks. Last pay period ended December 27. o 60 employees with a daily pay of $5,700. All receive pay through December 31. Financing: 6% interest note payable was made on January 31, 2017, and is due February 1, 2019. o 5-year loan was made on June 1, 2017. Terms are 7.5% annual rate, interest only until due date. Peyton Approved Adjusting Journal Entries 2017 Credit Date Accounts 31-Dec Depreciation Expense Accumulated depreciation Debit 2,642.86 2,642.86 31-Dec Amortization Expense Accumulated Amortization 31-Dec Interest Expense Interest Payable 31-Dec Insurance Expense Prepaid Insurance 137,400.00 31-Dec Baking Cost of Goods Sold Baking Supplies 137,400.00 250.00 31-Dec Office Supplies Expense Office Supplies 250.00 31-Dec Wages Expense Wages Payable 22,800.00 22,800.00 163,092.86 163,092.86 | Chart of Accounts Worksheet Adjusting Entries