Question

fill in the blank question
a company borrowed $10,000 from the bank at 5% interest. the loan has been outstanding for 45 days. demonstrate the required adjusting entry for this company by completing the following sentence. the required adjusting entry would be to debit the interest (expense/payable/receivable) account and (debit/credit) the interest (expense/payable/receivable) account.
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Explanation:

When a company incurs interest on an outstanding loan but hasn't paid it yet, the adjusting entry recognizes the incurred cost (Interest Expense, debited to increase expenses) and the owed amount (Interest Payable, credited to increase liabilities). This follows accrual accounting rules, matching the expense to the period it was incurred and recording the related liability.

Answer:

The required adjusting entry would be to debit the Interest expense account and credit the Interest payable account.