On November 1, Wright Co. borrowed $20,000 cash from Third Bank by signing a 90-day, 6% interest-bearing note.
On December 31, Wright recorded an adjusting entry to interest expense of $200.
On January 30, the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $ _______.

Question

contestada

Respuesta :

monica789412 monica789412 · Answer 1 · 2020-04-09T21:29:02+02:00

On January 30, the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $100.

Explanation:

On November 1, Wright Co. borrowed $20,000 cash from the Third Bank by signing a 90-day, and 6% of interest-bearing note.

On December 31, it was recorded an adjusting entry to interest expense of $200.
On January 30, which is the due date of the note, Wright will record the payment with a debit to Interest Expense in the amount of $100.
Interest expense is an expense which is known as a non-operating expense which is shown on the income statement. It also represents interest payable amount when it is borrowed. For Example,
bonds,convertible debt, loans or lines of credit
The main difference between the interest expense and the interest paid is that the discount amount and this difference changes the net amount of bond liability.
Interest expense is an amount determined by the interest rate on an account.