CAssumes that a company will follow proper accounting rules dAssumes that a comp

Question

CAssumes that a company will follow proper accounting rules dAssumes that a company will go the distance for their customers 1 poin QUESTION 12 Fair Company issued a $10,000 note to the Capital Bank on August 1, 2017. The not and a 12% rate of interest. The adjusting entry on Fair's books to record accrued interest expense on December 31, 2017 will 1. e carried a one-year te b. Increase liabilities a, Decrease assets and increase retained earnings by $500. C c. Increase liabilities C d. Decrease equit and decrease equity by $500. and decrease and increase equity by $400 liabilities by $1,200. 1 poi QUESTION 13 rate of 8% to the Capital Bank on August 1, 2017, The note carried a one-year term. The amount of cash flow from operating activities on the 2017 statement of cash flows would be: 1. Muller Company issued an interest-bearing note payable with a face amount of $4,000 and a stated intere

Explanation / Answer

Answer - C " Increase liabilities and decrease equity by $500 "

The Adjusting Entry on Fair's Books to record accrued Interest Expense on December 31,2017 Will be

" Increase liabilities and decrease equity by $500 "

Accrued Interest Expense Amount = $10,000 x 0.12 x 5/12

= $500

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