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10 March, 07:13

Chandler Co. has a loan that accrues interest at a rate of $28 a day. The company pays the interest once a quarter. What adjustments would be made at the end of a month in which no payment for interest was made?

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  1. 10 March, 10:00
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    The Adjustment Entry for accrual of Interest Expense will be as follows:

    Dr. Cr.

    Interest Expense $840

    Interest accrued Payable $840

    Explanation:

    Interest per day = $28

    Interest expense for the Month = $28 x 30 = $840

    $840 of Interest expense will be accrued at the end of the month and it should be adjusted accordingly.
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