Will the amount of the companys liabilities reported

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On December 21, a company borrowed $100,000 from its bank. The loan has an annual interest rate of 10%. The first payment on the loam will be due on January 21. The company's accounting year ends on December 31.

Q1. The December 31 adjusting entry will include a debit to interest _______________.

Q2. The December 31 adjusting entry will include a credit to interest _______________.

Q3. The amount of the December 31 adjusting entry is $__________.

Q4. If the December 31 adjusting entry is not made, will the company's net income be too high or too low?

Q5. If the December 31 adjusting entry is not made, will the amount of the company's liabilities reported on the balance sheet be too low, or okay?

Q6. Is the type of adjusting entry in questions 1 through 5 accrual or deferral?

Reference no: EM13525045

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