Appalachian Ski Shop Signs a Three-Month Note Payable to Help

question 193

Short Answer

Appalachian Ski Shop signs a three-month note payable to help finance increases in inventory for the winter ski season.The note is signed on October 1, 2022 in the amount of $30,000 with annual interest of 6%.What is the adjusting entry to be made on December 31, 2022 for the interest expense accrued to that date, assuming that no entries have been made previously to accrue interest?

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Definitions:

Arbitration

A form of alternative dispute resolution where a neutral third party hears evidence from the disputants and makes a decision that can be binding.

Traditional Litigation

The process of resolving disputes by bringing them to court, as opposed to alternative dispute resolution methods.

Criticisms

The expression of disapproval based on perceived faults or mistakes.

Arbitration Agreement

A legally binding contract in which two or more parties agree to resolve their disputes through arbitration rather than through litigation in court.