On feb 1, Lane borrowed $60000 at 8% interest. Lane has not recognized ant interest expense this year.
On Oct 1, Lane loaned Ashley Royal $20000 at 10% interest. No interest revenue has been collected or recorded.
2007-02-25 07:16:41 · 3 answers · asked by gurl_mcr17 1 in Business & Finance ➔ Investing
assuming you are doing this on 12/31 of the same year:
Debit: Interest expense (11/12)*8%*60,000
Credit: Interest payable (11/12)*8%*60,000
The second transaction is mechanically identical- you will just use interest income and interest receivable
2007-02-25 07:21:28 · answer #1 · answered by Homer J. Simpson 6 · 0⤊ 0⤋
Feb 1 Credit S.T or L.T Loan 60000
(Interest 8%)
Debit Cash 60000
Oct 1 Debit S.T or L.T Investment 20000
(Ashley 10%)
Credit Cash 20000
Add these in an Ammortization schedule.
2007-02-26 06:17:50 · answer #2 · answered by Mathew C 5 · 0⤊ 0⤋
Part one, debit interest expense and credit accrued interest for 11 months of the year.
Part two, debit interest receiveable and credit interest income for 3 months of the year.
I think you can multiply the numbers.
2007-02-25 15:20:21 · answer #3 · answered by Molly 6 · 0⤊ 0⤋