In 2013, Micro Marvels Signed a $70,000 Note Payable for 2

question 10

Essay

In 2013, Micro Marvels signed a $70,000 note payable for 2 years at 5%. Interest is payable monthly on the 10^th of each month. Micro has a December 31 year end, and adjusting entries are prepared at year end only. For calculation purposes assume each month has 30 days, and round amounts to the nearest dollar.
Instructions
Prepare the journal entries to record the following:
a. Payment of interest on December 10
b. The adjusting entry to accrue interest at December 31
c. Payment of interest on January 10

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Definitions:

Net Exports

The balance of a nation's trade, measured by subtracting its imports from its exports of goods and services.

Depreciation

The process of allocating the cost of a tangible or physical asset over its useful life, reflecting the decrease in value of an asset over time due to use, wear and tear, or obsolescence.

Gross Private Domestic Investment

The total spending on capital goods by private businesses and households within a country's economy, not including expenditures by the government.

Capital

Refers to financial assets or the financial value of assets, such as machinery and buildings, used in producing goods and services.