Question

The following information is given to in a trial balance:

The mortgage interest rate is 7%. (The mortgage was taken out on May 1.)
The mortgage payable is 42,000.
How do I find the interest expense and the interest payable?

Answer 1

No ones in the accounting section so i posted it here.

Answer 2

If you need more info from the trial balance or whatever, i'll post it. i think this is all you really need though.

Answer 3

can anyone help?

Answer 4

Interest expense:

The formula is the amount of money borrowed times the interest rate times the length of time that the money is borrowed for. So:

IE=42000x0.07x(what ever your term is)

I'm not an accounting major so I'm not sure what is meant by interest payable. I thought they were the same thing

Answer 5

let me read your problem - i have a degree in accounting

Answer 6

i am assuming year end is 12/31

Answer 7

Awesome Juanita. Just what we need.

Answer 8

this is for may 31st

Answer 9

interest payable is the CR of the journal entry for interest expense. She has to accrue inteerest.

Answer 10

adjusting entry for may 31st

Answer 11

Yes but you need a length of time.

Answer 12

Are we going from Jan 1?

Answer 13

It just says that the business opened on the 1st of May and that this is prepared on May 31st.