Burrow, inc. borrowed $20,000 with an annual rate of 6%, and the note and interest are due at the end of two years. by the end of the first month, the interest incurred equals $100.
Accrued Interest means the total amount of all accrued or capitalized interest paid during that period, without duplication, for the Company during the Trial Period, excluding Loan Fees. Interest accrues when you take out a loan or line of credit. Expenses and interest on the books must be recorded.
To record interest accrued in an accounting period, debit the Interest Expenses account and credit the Interest Accrued Accounts. This increases costs and liabilities. Accrued interest accumulates over time and is not material to a company's operational productivity over time. Accrued interest is generally expected to be received or paid within one year and is therefore counted as a current asset for the lender and current liability for the borrower.
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