Answered

Explore Westonci.ca, the top Q&A platform where your questions are answered by professionals and enthusiasts alike. Find reliable answers to your questions from a wide community of knowledgeable experts on our user-friendly Q&A platform. Discover in-depth answers to your questions from a wide network of professionals on our user-friendly Q&A platform.

Timberline Lodge The accounting records of Timberline Lodge are maintained on the basis of a fiscal year ending April 30. The facts listed below are to be used for making adjusting entries at April 30, 20X1. Required: Prepare the adjusting entries needed by Timberline Lodge on April 30, 20X1. (a) A bank loan in the amount of $200,000 was obtained on April 1, 20X1, by issuing a 15% note payable due in three months. No interest has been paid or recorded.

Sagot :

Parrain

Based on the amount obtained and the date that the loan is due, the adjusting entry is:

  • Debit Interest expenses - $2,500
  • Credit Note Payable - $2,500

What would be the adjusting entries?

First find the interest expense which would be:

= Loan amount x Interest / 12 months

= 200,000 x 15% / 12months

= $2,500

Note: Interest was divided by 12 months because the interest should only be for the month of April.

Adjusting entry would be:

Date                 Account Title                                     Debit               Credit

April 30           Interest expense                             $2,500

                       Notes Payable                                                          $2,500

Find out more on recording notes payable at https://brainly.com/question/17612082.

Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.