Question

On the first day of January, Harris Company borrowed $3,000 on a one-year note payable bearing interest at 5% per year. The note specifies that principal and interest must be paid in full at the end of the one-year period. On June 30, the adjusted trial balance will show Interest Payable of

Answer 1

Answer: $75 Credit

Step-by-step explanation:

Based on the information given in the question, there will be a debit of interest expense and also a credit of interest payable. This will be in the amount of:

= $3000 × 5% × 6/12

= $3000 × 0.05 × 0.5

= $75

Debit: Interest expense $75

Credit: Interest expense $75

The answer is $75 credit.