December 18, 2017. Waren Sports Supply borrowed $60,000 from First American Bank and Trust by...
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Accounting
December 18, 2017. Waren Sports Supply borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable with a stated annual interest rate of 5%.$60,000 was received from the bank and deposited.
Waren's Year-End procedures for 2017.
Interest Expense. Interest on loans is paid annually on the anniversary of the note. Interest accruals are calculated using a 365-day year with the day after the note was made counting as the first day.
Make a journal entry for Interest Expense following year-end procedures.
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