On September 1, 2021, Daylight Donuts signed a $171,000, 6%, six-month note payable with the amount...

On September 1, 2021, Daylight Donuts signed a $171,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022.

Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

Expert Solution

	CALCULATION OF TOTAL INTEREST AND INTEREST RECOGNISED AS ON DECEMBER 31
	Loan Amount	Total Through Maturity - Upt0 01st of March		Total Upto December 31
	Principal	$ 1,71,000		$ 1,71,000
	Rate %	6	%	$ 6	%
	Time	6	Month	4	Months
	Total Interest	$ 5,130		$ 3,420

Journal entry for interest expenses as on December 31 is passed as below,

Journal Entries
Date	ACCT Title and explanation	Debit	Credit

December, 31	Interest Expenses	$3,420
	Interest Payable		$3,420
	(To record the interest Expenses)



	Answer = Interest Payable as on December 31 = $ 3,420

ekkarill92 answered 1 year ago

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