Answer these questions that are related to the following Interest Payable T-acco

Question

Answer these questions that are related to the following Interest Payable T-account a. VWiat is the amount of the February 28 adjustment? b. What account would most likely have been credited for the amount of the February transactions? Interest payable Cash Interest expense c. VWiat account would most likely have been debited for the amount of the February 28 adjustment Interest payable O Cash Interest expense d. Why would this adjusting entry have been made? The entry would have been made to close the interest payable account. The entry would have been made to make the income statement and balance sheet more ac

Explanation / Answer

Requirement a:

February 28 adjustment = Feb 28 balance + Feb transactions – Feb 1 balance

= 2170 + 1600 – 1160

= 2610

Feb 28 adjustment = $2610

Requirement b:

Account most likely to be credited for the amount of feb transactions is Cash.

Journal Entries:

             To Interest Payable

             To Cash

Correct answer is Cash

Requirement c:

Account most likely to have been debited for the amount of feb 28 adjustment is Interest Expense.

Correct answer is Interest Expense.

Requirement d:

       Adjustment entry would have been passed to make the income statement and balance sheet more accurate.

Second option is correct

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

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