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Iris Limited borrowed $90,000 from Bank by signing a one-year 8% note payable on 1 May 2019

Accounting

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Iris Limited borrowed $90,000 from Bank by signing a one-year 8% note payable on 1 May 2019. The year end of Iris Limited is 31 December.

Required:

(a) Calculate the interest expense for Iris Limited for the year ended 31 December 2019. (2 marks)

(b) Prepare journal entries to record the payment of the note payable for Iris Limited on 1 May 2020. (Narration is NOT required.)