Question

Accrue the interest expense for the mortgage payable at December 31. Gone in a Flash has not recorded any interest expense since the principal and interest payment on January 31, 2017 (interest rate on the mortgage payable is 7%).

The mortgage payable is 200,000.

Prepare the adjusting end of year journal entry.

Answer 1

this is interest accrual entry . if no entry is made by gone in a flash ,the entry is to made for Jan-dec (the whole year):

Dec-31	Interest expense	$     14,000
	interest payable		$     14,000
	(200000*7%)

but since no entry has been made above entry is correct

Just to be safe i am also , including interest expense accrual for just december month

have you asked to accrue for Dec month only this is the entry

Dec-31	Interest expense	$        1,167
	interest payable		$        1,167
	(200000*7%*1/12)