At the end of the year, the business owes $10,000,000 on interest-bearing notes payable. During the year, it records interest expense as it's paid to lenders. Accordingly, the business recorded $515,400 interest expense during the year. At the close of the year, it owes $97,500 interest that hasn't yet come due for payment and that hasn't been recorded.
a. What adjusting entry is made at the end of the year?
b. What is the amount of interest expense reported in its annual income statement