The loan payable for capital bank is 725000
The loan payable for freedom bank is 2150000
Elaborate Home Décor has two loans outstanding as of 12/31/2016. Interest is paid annually on January 1st. The facts on each loan are as follows: Capital Bank Loan – outstanding since January 1, 2016 with a 3.25% interest rate. This loan was taken out to finance the construction of the Storage Building. Interest for the year and 10% of the principle will be paid to the bank on January 1, 2017. Except for recording the initial cash received and loan, no additional entries have been made. Freedom Bank Loan – also outstanding all of 2016 with 5.9 % interest rate (enter the last digit of your student number). Interest is due on January 1, 2017. Principle is due on January 1, 2022. Since interest will not be paid to the Bank until 2017, Elaborate Home Décor office staff did not accrue any interest
What would be the year end adjusting entry?