DA company pays $18,000 in interest on notes, consisting of $12,000 interest tha

Question

DA company pays $18,000 in interest on notes, consisting of $12,000 interest that accrued during the last accounting period and $6,000 of interest accumulated during this accounting period but not previously recorded on the books. The journal entry for the interest payment should:

A) debit Interest Expense for $18,000 and credit Cash for $18,000.

B) debit Cash for $18,000 and credit Interest Payable for $18,000.

C) debit Interest Expense for $6,000, debit Interest Payable $12,000 and credit Cash for $18,000.

D) debit Interest Payable for $12,000, debit Accrued Interest $6,000 and credit Cash for $18,000.

Explanation / Answer

Answer is

C) debit Interest Expense for $6,000, debit Interest Payable $12,000 and credit Cash for $18,000.

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.