Canada Adjusting entry on accruals

[khalid_95]

August 31 is the fiscal year end. Adjusting information is Interest on 5% note payable 48000 is payable at the end of each month and 8000 of the principal must be paid on dec 31 each year. Interest payments are up to date as at aug 31 2017.. What should be the adjusting entry

 

[Drmdcpa]

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[khalid_95]

i believe the entry to be interest exp 2400 dr interest payable 2400 cr. is it right?

 

[khalid_95]

in the question it is said the interest payments are up to date as at aug 31. So does that mean accrued interests are paid already and there should be no adjusting entry for this?

 

[Simon W]

in the question it is said the interest payments are up to date as at aug 31. So does that mean accrued interests are paid already and there should be no adjusting entry for this?

You need to focus on the principal if the interest is up to date.