Prepare the journal entry to adjust interest expense

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Question - On 1 May 2022 XYZ Ltd issued a 90-day 5% bill payable to a supplier to cover an account payable owing. Amount owing in the accounts payable ledger was $5,000. The bill payable was settled on maturity (30 July 2022). XYZ Ltd prepares accounts at 30 June 2022.

Required -

(a) Calculate the interest due on the bill payable (show workings).

(b) Prepare the journal entry to record the issue of the bill payable on 1 May 2022.

(c) Prepare the journal entry to adjust interest expense as at 30 June 2022.

(d) Prepare the journal entry to record the settlement of the bill at 30 July 2022.

Reference no: EM133109410

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