Question 2 2 pts Hull Company purchased equipment on November 1, 2019 and gave a 3-month, 6% note with a face value of $20,000

Accounting Aug 11, 2020

Question 2 2 pts Hull Company purchased equipment on November 1, 2019 and gave a 3-month, 6% note with a face value of $20,000. The December 31, 2019 adjusting entry is debit interest Expense and credit Cash, $200. debit Interest Expense and credit interest Payable. 51.200, debit Interest Expense and credit interest Payable. $300. debit interest Expense and credit Interest Payable. $200. Next • Previous

Expert Solution

Answer:

Amount of Note Payable = $20,000

Interest Rate = 6%

No. of Months to record interest expense for the year ended December 31, 2019 = 2 Months (November and December)

Amount of Interest = 20000*6%*2/12 = $200

Adjusting Entry on December 31, 2019:

Interest Expense A/c Dr. ...............$200

Interest Payable A/c ........................$200

Answer: Debit Interest Expense and Credit Interest Payable $200

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