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

Interest rate 12%, Fiscal Year End December 31

To determine the amount of interest expense that should be recorded in a year-end adjusting entry, we need to know the principal amount and the time period for which the interest is being calculated.

Let's assume we have the following scenarios:

Scenario 1: Principal amount of $10,000, time period of 6 months
To calculate the interest expense for this scenario, we need to use the formula: Interest Expense = Principal amount * Interest Rate * Time period
In this case, the interest expense would be:
Interest Expense = $10,000 * 0.12 * (6/12) = $600

Scenario 2: Principal amount of $5,000, time period of 9 months
Using the same formula, the interest expense for this scenario would be:
Interest Expense = $5,000 * 0.12 * (9/12) = $450

Scenario 3: Principal amount of $12,000, time period of 3 months
Again, using the formula, the interest expense for this scenario would be:
Interest Expense = $12,000 * 0.12 * (3/12) = $360

Now, since these are year-end adjusting entries, we need to adjust the interest expense based on the time remaining until the year end, which is December 31.

Let's assume the scenarios occurred on September 30. Therefore, for Scenario 1, there are 3 months remaining until year end; for Scenario 2, there are 3 months remaining until year end, and for Scenario 3, there are 9 months remaining until year end.

To adjust the interest expense, we need to multiply it by the time remaining until year end divided by 12 (since the interest rate is an annual rate):

Adjusted Interest Expense (Scenario 1) = $600 * (3/12) = $150
Adjusted Interest Expense (Scenario 2) = $450 * (3/12) = $112.50
Adjusted Interest Expense (Scenario 3) = $360 * (9/12) = $270

So, the amount of interest expense that should be recorded in a year-end adjusting entry under each assumption would be:
Scenario 1: $150
Scenario 2: $112.50
Scenario 3: $270

Please note that these calculations are based on the given information and assumptions provided.