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3 July, 04:22

On september 1, abc company borrowed $50,000 on a 6%, 9 month note payable to xyz national bank. given no previous adjusting entries have been recorded, abc's adjusting entry four months later at december 31 would include a:

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  1. 3 July, 06:35
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    To determine the answer to this, let us first determine the interest using the formula:

    Interest = Principal amount * Interest rate * Number of months / 12

    September to December would be 4 months, therefore:

    Interest = $50,000 * 0.06 * 4/12

    Interest = $1,000

    Therefore the adjusting entry should be:

    debit to Interest Expense of $1,000
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