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Question
On January 1, Luther Co. issued a $1,000,000, 8%, 5-year installment note payable. The first note payment consists of $250,456 principal plus interest due on January 1 of the next year.
a. Journalize the adjusting entry at December 31 to accrue interest for the year.
b. Show the account(s) and amount(s) and where it(they) will appear on a multiple-step income statement prepared on December 31.
c. Show the account(s) and amount(s) and where it(they) will appear on a classified balance sheet prepared on December 31.
Answer
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