The adjusting entry for the accrued interest at December 31 on the note is $198.
Amount of interest = 9900 x ((12% / 360) x 60) = $198
Interest Expense Debit $198
Interest payable Credit $198
Interest Expense pertains to the cost of borrowing cash. It's miles the fee that a lender charges a borrower for using the lender's money. On the income assertion, interest rate can represent the fee of borrowing cash from banks, bond investors, and other assets.
An Interest Expense is the cost incurred with the aid of an entity for borrowed finances. Interest Expense is a non-working price proven at the profits declaration. It represents interest payable on any borrowings bonds, loans, convertible debt or lines of credit score.
To finish, interest expense is the borrowing value or finance value the corporation incurs while it borrows money or rentals an asset. Interest payable is the quantity due at the give up of an accounting yr or working cycle. This quantity is a present day legal responsibility as cutting-edge liabilities are due inside a year.
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Q.On November 1, alan company signed a 120-day, 12% note payable, with a face value of+$19,800. what is the adjusting entry for the accrued interest at December 31 on the note?
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