Question

Cuthill Corporation has 2 loans outstanding: • \$10260.16 taken on Feb 1, 20x1 at 8\% interest • \$22746.75 taken on Nov 30, 20x1 at 12\% interest The final year-end adjusting entry for interest expense for the year 20x1 will be: Select one: a. A debit to interest expense of \$ 911.48 b. A credit to interest expense of \$ 1207.35 c. A credit to interest expense of \$ 1138.95 d. A debit to interest expense of \$ 979.88

          Cuthill Corporation has 2 loans outstanding:
• \$10260.16 taken on Feb 1, 20x1 at 8\% interest
• \$22746.75 taken on Nov 30, 20x1 at 12\% interest The final year-end adjusting entry for interest expense for the year
20x1 will be:
Select one:
a. A debit to interest expense of \$ 911.48
b. A credit to interest expense of \$ 1207.35
c. A credit to interest expense of \$ 1138.95
d. A debit to interest expense of \$ 979.88

Cuthill Corporation has 2 loans outstanding:
• $10260.16 taken on Feb 1, 20x1 at 8% interest
• $22746.75 taken on Nov 30, 20x1 at 12% interest The final year-end adjusting entry for interest expense for the year
20x1 will be:
Select one:
a. A debit to interest expense of $ 911.48
b. A credit to interest expense of $ 1207.35
c. A credit to interest expense of $ 1138.95
d. A debit to interest expense of $ 979.88

Added by Rebecca R.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Liliane Martins

Step 1

For the loan taken on Feb 1, 20x1 at 8% interest: Principal amount = $10260.16 Interest rate = 8% Interest expense = Principal amount * Interest rate Interest expense = $10260.16 * 8% = $820.81 For the loan taken on Nov 30, 20x1 at 12% interest: Principal Show more…

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a. A debit to interest expense of $911.48 b. A credit to interest expense of $1207.35 c. A credit to interest expense of $1138.95 d. A debit to interest expense of $979.88 Select one: 20x1 will be: $10260.16 taken on Feb 1, 20x1 at 8% interest Cuthill Corporation has 2 loans outstanding: $22746.75 taken on Nov 30, 20x1 at 12% interest The final year-end adjusting entry for interest expense for that year.