 we've been talking about the adjusting entries last time we're going to be looking at the specific adjusting entry this time related to interest so that's going to be dealing with one of our issues with the loans down below so we're looking at these loans i'm going to say the cutoff date is february 28th oftentimes you might see a cutoff date as the year-end cutoff date we're trying to make our financial statements correct as of this point in time and one of the issues with the loans might be that we had some interest that has been incurred that we have not yet recorded and interest can be a little bit of an abstract concept it's a little bit more concrete a lot of times in people's minds you can imagine if you're renting a building for example you got your office building there and for whatever reason you were able to negotiate a deal with your landlord saying i'm going to use the building for the next year and i won't pay you until after that time the year after i've used it right after it's been used for a year then i'll pay you after that and if you obviously deals like this you can imagine them happening as long as you paid them enough money to be paying them at a later point in time and they trusted you and so on and in that case you would say well if you report the expense after you use the building then it's not exactly correct because you consumed the use of the building from an accrual standpoint in the prior year so if you report the expense in the following year you have a timing difference you would think you would have to report the expense of consuming the building when you used it the same could be done said for the interest interest is basically rent on the purchasing power of the money you've got money so that you could buy property plants and equipment and generate revenue on it and if and if they if they when you pay back the rent on the money if you've consumed some of the purchasing power you should be applying the rent on the money the interest to the same period that you used to consume it that's the basic concept we're going to here