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W25 ACCT D001A 01Y Finan Accountng I Final Exam - DeAnza

Multiple fill-in-the-blank

Please write the correct journal entry for the below transaction: Record the accrued interest, if any, for ONE MONTH of borrowing $120,000 at 10% annual interest. Debit [Fill in the blank], for [Fill in the blank], Credit [Fill in the blank], for [Fill in the blank],

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We start by understanding the transaction: the borrower incurred interest for one month on a loan of $120,000 at an annual rate of 10%. The monthly interest is 10% / 12 = 0.833...%; 0.10 × 120,000 × (1/12) = 1,000. This is an accrual entry, recognizing the expense of the period and th......Login to view full explanation

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