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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.

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