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Can you tell me how to calculate this amount, $12,375?
a. The long-term debt is payable in annual installments of
$30,000, with the next installment due on July 31.
On that date, Speedy Shipwill also pay one year's interest at 9%.
Interest was paid on July 31 of the preceding year. Make the adjusting entry to accrue interest expense at year-end.
| Date | Accounts and Explanation | Debit | Credit |
| (a) | Interest Expense | 12,375 | |
| | | | Interest Payable | | 12,375 |
| | | | | | |
| | | | | | |
| | | | To accrue interest expense at year-end. | | |
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