Assume that on July 1, 2018, Togo's Sandwiches issues a $2.97 million, one-year note. Interest is payable at maturity.

Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions.

(Enter your answers in dollars, not in millions. Do not round intermediate calculations. Round your answers to the nearest dollar amount.):

7% Dec. 31-

9% Sept. 30-

6% Oct. 31-

8% Jan 31-

7% interest at Cec-31 for 6 months:

Dr Interest  expense(7%*$2,970,000*6/12) $ 103,950

Cr Interest payable                                                          $103,950

9% interest at Sept 30 for 3 months:

Dr Interest  expense(9%*$2,970,000*3/12) $66,825

Cr Interest payable                                                          $66,825

6% interest at Oct 31 for 4 months:

Dr Interest  expense(6%*$2,970,000*4/12) $ 59,400

Cr Interest payable                                                          $59,400

8% interest at Jan 31 for 7 months:

Dr Interest  expense(8%*$2,970,000*7/12) $138,600  

Cr Interest payable                                                          $ 138,600

Explanation:

The rationale for debiting interest expense is that is an expense account and increase in expense is normally debited to expense account while interest payable account is credited as the interest obligations are yet discharged by a way of paying cash to investors

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