Answer to Question #319411 in Accounting for Milan

Question

During the fourth quarter ended December 31, Year 1, Lighting Fixtures Inc. (LFI) had average outstanding revolving bank loans of $1.2 million. Assume that the quarterly interest charges associated with these loans was $7,500. If LFI makes the interest payment to the banks on January 15, Year 2, what is the journal entry (if any) made by the company on December 31 to reflect the above?

-Debit Interest Expense $7500

-Credit Accrued Interest $7500

The answer is highlighted. Are there any other journal entries that I need to know for this question? Thank you.

Answer 1

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