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