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    Adjusting Entry for Interest: Milton Company

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    On December 1, Milton Company borrowed $420,000, at 10% annual interest, from the Tennessee National Bank. Interest is paid when the loan matures one year from the issue date. What is the adjusting entry for accruing interest that Milton would need to make on December 31, the calendar year-end?

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    Solution Preview

    Please find the answer attached with all calculations.

    Annual Interest = ...

    Solution Summary

    The solution shows the adjusting entry as well as the calculations showing the calculation of accrued interest using the Milton Company example.