Calculate the year-end adjusted balances

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The question is, Midshipmen Company borrows $10,500 from Falcon Company on July 1, 2018. Midshipmen repays the amount borrowed and pays interest of 12% (1%/month) on June 30, 2019.

How would I calculate the 2018 year-end adjusted balances of Interest Payable and Interest Expense (assuming the balance of Interest Payable at the beginning of the year is $0).

Reference no: EM131812388

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