Step 8 - Dealing with adjustments - interest on loan still accrued

Step 8 - Dealing with adjustments - interest on loan still accrued

Bank loan = 85,000 (From Trial Balance) Interest rate = 5% Interest expense (accrued) = 85,000 × 5% = 4,250

To Record:

SOPL -Interest expense = 4,250 (Expense for that period)

SOFP - Current liability: Accrued interest payable = 4,250