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#9 Unrecorded Liability: Adjusting Entry

Refer to PE 4-8. (1) Make the adjusting entry necessary on the company’s books with respect
to this loan on December 31. (2) Make the journal entry necessary on the company’s
books on the following April 30 to record payment of interest for the first year of the loan.
Note: When making this April 30 entry, don’t forget the adjusting entry that was made on
December 31.

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