[Biff-1955-Tannen]

Is there a reason that loan #2’s journal entry has a credit above the debit? The accounts and figures make sense, but I don’t get why, and have never seen a credit above the debit.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[nib]

@ Biff-1955-Tannen

pls send some more details of simulation .

I am still pulling on government mcq .

[Biff-1955-Tannen]

Loan 2 is an 8%, $1,000,000 loan with interest due annually on December 31. Drake did not record or pay the required Year 2 interest payment until January 1, Year 3. Prepare the journal entry Drake should record at December 31, Year 2.

Accrued interest payable – 80,000
Interest expense 80,000 –

Formatting is changed, but that is the answer for the entry it gave.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[monikernc]

Biff, is the entry reducing the payable and interest expense for year 2 because it wasn't paid until year 3?

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Biff-1955-Tannen]

@monikernc as far as I can tell it's just a normal entry. This question is weird because it states the fact that we didn't prepare the entry for last year, but then it just like completely ignores what it just said and tells you to make the entry they would make at the end of the year. So I don't even know why the question mentions the fact that they didn't record it last year, if what we have to do has absolutely nothing to do with they entry we are making.

(Those little dashes are empty cells, so it's crediting the payable and debiting the expense) The accounts and figures are right, but they just have the credit above the debit, so then it counts it wrong if you do the entry how you normally would with dr first and then cr

————————————–dr———-cr
Accrued interest payable ————–80,000
Interest expense ———80,000

Maybe Jeff can provide some guidance?

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[monikernc]

i swear these exams get us going on the weirdest things sometimes. did you do an “ask jeff” email?

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[marqzho]

It doesn't matter whether Debit or Credit goes first

REG 90
FAR 95
AUD 98
BEC 84

[Biff-1955-Tannen]

I'll email Jeff and ask.

And yes it does.

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[marqzho]

If the answer is
Cr. Accrued interest payable 80000
Dr. Interest expense 80,000

and your answer is
Dr. Interest expense 80,000
Cr. Accrued interest payable 80000

and it said you were wrong, then for sure this is just a little bug in the software. Who said normally Dr goes first ? lol

REG 90
FAR 95
AUD 98
BEC 84

[Biff-1955-Tannen]

Every accounting professor I've ever had, and every other simulation?

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[marqzho]

I have taken FAR already 🙂 hopefully I don't need to do it again.

Maybe I was wrong about which side goes first. Looking forward to Jeff answer to your question.

REG 90
FAR 95
AUD 98
BEC 84

[Author]

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