Question

A. On December31, 2019, the Notes Payable account at Northwood Manufacturing Company had a balance of $9000. This balance represented a three-month, 10 percent notebissued on November 1.

Answer 1

A	B	C	D	E	F	G	H
2
3		Notes Payable	$90,000
4		Interest rate	10%
5
6		Since the note has been issued on Nov 1 therefore 1-month interest will be accrued.
7
8		Interest Accrued	=$9000*10%*(1/12)
9			$750.00	=D3*D4*(1/12)
10
11		Thus the adjusting entry on Dec 31 will be as follows:
12		Date	Account	Debit	Credit
13		31-Dec	Interest Expense	$750.00
14			Interest Payable		$750.00
15