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On May 1, 2019, Alang Corporation borrowed $3,600 on a two-year, 6% note payable. Interest is due and payable at the end of each six months. Alang makes all interest payments on schedule. The correct December 31, 2020, adjusting entry would be

Respuesta :

Alang Corporation Journal entry. Debit Interest Expense, $36; Credit Interest Payable, $36.

What is interest?

The cost of borrowing money or the fee you charge to lend it is referred to as "interest." A percentage that is applied to the actual money plus interest must be paid.

Journal entry Alang Corporation

Date           Particular              L.F.     Dr. Amt.  Cr. Amt.

                  Interest expenses             $36

                  Interest payable                                $36

Interest payable = $3600 × 6 % ×2÷12

Interest payable = $36

As a result, debit Interest Expense, $36; Credit Interest Payable, $36

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