The $80,000 Note was borrowed on April 1, Year8. It is a 2-year note, payable on March 31, Year10. No payments (interest or principle) are made until the due date. The annual rate of interest is 6%. Reminder: Mike Consulting has a 12/31 year end.
1. What is the adjusting entry for this situation?
2. What does Mike report as interest payable one year later on 12/31/Year9?