On October 1, 2018, Mills Company borrowed $131,000 cash on a one-year note that required Mills to pay 5 percent interest and $131,000 principal, both on September 30, 2019. Assuming the note is paid when due in 2019, what is the debit to interest expense when recording the payment of the note?

the amount that debited to interest expense is $4,912.50

Explanation:

The computation of the amount that debited to interest expense is as follows:

Here we calculate it from Jan to Sep 30, the number of months would be 9 months

So, the amount of interest expense is

= $131,000 × 5% × 9 months ÷ 12 months

= $4,912.50

Hence, the amount that debited to interest expense is $4,912.50

lbc corporation makes and sells a product called product wz. each unit of product wz requires 4.1 hours of direct labor at the rate of $20.00 per direct labor-hour. management would like you to prepare a direct labor budget for june. the company plans to sell 28,000 units of product wz in june. the finished goods inventories o