the long-term note payable bears an interest of 12% per year. the
unadjusted interest expense account equals the amount paid for the
first 11 months of the 2008 fiscal year.(3,300). The 300 accrued
interest for april has not yet been paid or recorded.Note: that the
company is required to make a 10,000 payment toward the note payable
during the 2009 fiscal year.
To calculate the interest expense for the 2008 fiscal year, we need to consider the interest rate, the time period, and the principal amount of the note payable.
1. Calculate the principal amount:
Since the $10,000 payment will be made in the 2009 fiscal year, it means that the principal amount of the note payable was $10,000 at the beginning of 2009.
2. Calculate the time period:
The fiscal year begins in January and ends in December. The unadjusted interest expense account equals the amount paid for the first 11 months of the 2008 fiscal year, which means we need to calculate the interest expense for January to November.
3. Calculate the monthly interest expense:
The annual interest rate is 12%. To calculate the monthly interest rate, divide the annual interest rate by 12:
Monthly interest rate = 12% / 12 = 1%
4. Calculate the interest expense for January to November:
The interest expense for each month is calculated by multiplying the principal amount by the monthly interest rate:
Interest expense for each month = Principal amount * Monthly interest rate = $10,000 * 1% = $100
Since the unadjusted interest expense account equals the amount paid for the first 11 months of the 2008 fiscal year, the total interest expense for January to November is:
Total interest expense = Interest expense per month * Number of months = $100 * 11 = $1,100
5. Calculate the accrued interest for April:
The accrued interest for April is $300, which means it hasn't been paid or recorded yet. This accrued interest needs to be added to the total interest expense for January to November:
Total interest expense += Accrued interest = $1,100 + $300 = $1,400
Therefore, the unadjusted interest expense account for the 2008 fiscal year is $1,400.