Adjusting Journal Entry

You counted the beans copiously. Every one of the 91 days in your quarter. But, unfortunately, there were some adjustments to be made, because the bills didn't come in the following quarter.

You borrowed 50 million bucks, committing to pay back $100 million to your lender in ten years. Cash changes hands only twice: on day one, you get a check for $50 million, and in ten years, you write a check for $100 million. In the interim, attributable interest accrues, and you must make adjusting journal entries to account for the liability that you will owe in this process.

It makes things all the more difficult when the transaction happens on Valentine's Day, i.e. the middle of the quarter, so that you'll perpetually have adjustments to make along the way, normalizing interest liabilities so that they conform to the dates in which the transaction happened.