Question

trent restaurant borrowed $110,000 on october 1 by signing a note payable to hometown bank. the interest expense for each month is $825. the loan agreement requires trent to pay interest on january 2 for october, november and december. read the requirements. 1. make trents adjusting entry to accrue monthly interest expense at october 31, at november 30, and at december 31. date each entry and include its explanation. (record debits first, then credits. select the explanation on the last line of the journal - entry table.) make the adjusting entry to accrue monthly interest expense for october. date accounts and explanation debit credit

Explanation:

Step1: Determine the accounts involved

Interest Expense is debited as it is an expense increasing, and Interest Payable is credited as it is a liability increasing for the accrued interest.

Step2: Record the adjusting entry for October

For the month - end of October, the interest expense has been incurred but not yet paid.

Date	Accounts and Explanation	Debit	Credit
	Interest Payable		825
	To accrue interest expense for October

Step3: Record the adjusting entry for November

The same logic applies for November.

Date	Accounts and Explanation	Debit	Credit
	Interest Payable		825
	To accrue interest expense for November

Step4: Record the adjusting entry for December

For December - end.

Date	Accounts and Explanation	Debit	Credit
	Interest Payable		825
	To accrue interest expense for December

Answer:

Date	Accounts and Explanation	Debit	Credit
	Interest Payable		825
	To accrue interest expense for October
Nov 30	Interest Expense	825
	Interest Payable		825
	To accrue interest expense for November
Dec 31	Interest Expense	825
	Interest Payable		825
	To accrue interest expense for December