Rosewood recorded and pain interest on all of their outstanding notes 2 months ago. Payments are due on the netes every 6 months, and the interest rate on both notes is 4.5% ( They where issued by the same bank with the same terms, just 2 years apart.)
T accounts
Loan Payable - Cr. of $51,790,060
Note Payable - Cr. of $56,017,820
Interest Expense - Dr. of $2,113,880
What is the Adjusting Entry?