Started business on Jan.1st. List below are some events that occurred its first year operation.
1. Equipment worth $150,000 was purchased on Sep. 1st, in exchange for $50,000 in cash and two- year, 10% note with a principal amount of $100,000.
2. There was no interest paid on the note during the year.
The question is:
What is the interest expense(which is on the debit side) for this year.
And what is the interest payable (which is on the credit side) for this year.