On November 1, Alan Company signed a 120-day, 10% note payable, with a face value of $11,700. What is the adjusting entry for the accrued interest at December 31 on the note

Debit interest expense, $195; Credit interest payable, $195

Explanation:

The adjusting entry for the accrued interest at December 31 on the note is:

General Journal                   Debit         Credit

Interest expense                   $195

($11,700 * 10% * 60/360)

Interest payable                                       $195