Question

Prepare the journal entry for every transaction that occurred for the MONTH of June.

Supplement info:

(TRANSACTION 2: Signed a 10-year note for a $1.5 million bank loan which includes a 4% annual interest rate)

	Adjusting Entries
June 30	Recognize the June radio advertising incurred ($4,500).
June 30	Recognize the interest incurred on the note from transaction 2 for June, to be paid in July.
June 30	Recognize $20,000 of wages owed for June, that will be paid to employees in early July.
June 30	Recognize the entire yearly depreciation on your computer equipment of $3,000.
June 30	Recognize the $15,000 rent revenue for June ($10,000 of which was prepaid in May).

Answer 1

Interet expense is calculated as under

(1,500,000 x 4 %) x 1/12

=5,000