Following are selected transactions for Vitalo Company. Nov. 1 Accepted a $12,000, 180-day, 5%...
Question:
Following are selected transactions for Vitalo Company.
| Nov. 1 | Accepted a $12,000, 180-day, 5% note dated November 1 from Kelly white in granting a time extension on her past-due account receivable. |
| Dec. 31 | Adjusted the year-end accounts for the accrued interest earned on the white note. |
| Apr. 30 | White honored her note when presented for payment; February has 28 days for the current year. |
Complete the table to calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries.
Adjusting Journal Entries - Interest
Adjusting journal entries pertain to entries that are usually made at every year-end. This is done to account for any income earned and expense incurred following the accrual basis of accounting. One typical example of adjustments made at year-end is interest income/expense.
Answer and Explanation: 1
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View this answerInterest is computed using the formula below.
Interest = Principal x Interest rate x Term/360 days, where as the term refers to the duration of the...
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