Prepare the necessary adjusting entry for accrued interest, Accounting Basics

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Prepare the necessary adjusting entry for accrued interest

Response to the following problem:

Favor Hospital invested $60,000 in 8 percent government bonds on August 1, 20X1. These bonds, which were purchased at face value, pay interest annually on August 1, commencing August 1, 20X2.

Required: Assuming that adjustments are made annually on December 31 only, prepare the necessary adjusting entry for accrued interest as of December 31, 20X1.

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Accounting Basics: Prepare the necessary adjusting entry for accrued interest

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