Answer and Explanation:
The adjusting entry is shown below:
Interest Expense $2,775
To Interest Payable$2,775
(being interest expense is recorded)
The computation is shown below:
The calculation is
= $370,000 × 9% ÷ 12 months
= $2,775
Here the interest expense is debited as it increased the expenses and credited the interest payable as it also increased the liabilities
