Asked by Veronica Krall on May 21, 2024
Verified
Below are two related transactions for Golden Corporation.The annual accounting period ends December 31.The books are adjusted only at year-end.
A.October 1,2019: Golden Corporation borrowed $100,000 and signed a note providing for 8% interest.The principal and interest are due in one year on September 30,2020.
B.December 31,2019: End of the annual accounting period.
Prepare the required journal entry at October 31 and December 31,2019 for each of the above items.
Interest-Bearing Note
A debt instrument that requires the borrower to pay not only the principal amount but also periodic interest payments.
Adjusting Entries
Entries made in journal accounts at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.
Annual Accounting Period
The 12-month period a company uses for accounting purposes to report its financial performance.
- Discuss the technique and relevance of adjusting entries in the context of precise financial reporting.
- Utilize the concepts of accounting to create adjusting entries dealing with accruals and deferrals.
Verified Answer
AK
B.December 31,2019
Learning Objectives
- Discuss the technique and relevance of adjusting entries in the context of precise financial reporting.
- Utilize the concepts of accounting to create adjusting entries dealing with accruals and deferrals.