https://imgur.com/a/0Fvj4 view image above for chart QUESTION 11 Choose the corr
ID: 2593621 • Letter: H
Question
https://imgur.com/a/0Fvj4
view image above for chart
QUESTION 11
Choose the correct Adjusting Entry to record Interest Expense on the two notes that Exmore acquired.
A. None of these are correct
B. Debit Interest Expense $136.11 and Credit Interest Payable $136.11
C. Debit Interest Payable $136.11 and Credit Interest Expense $136.11
D. Debit Interest Expense $91.67 and Credit Interest Payable $91.67
E. Debit Interest Payable $91.67 and Credit Interest Expense $91.67
A. None of these are correct
B. Debit Interest Expense $136.11 and Credit Interest Payable $136.11
C. Debit Interest Payable $136.11 and Credit Interest Expense $136.11
D. Debit Interest Expense $91.67 and Credit Interest Payable $91.67
E. Debit Interest Payable $91.67 and Credit Interest Expense $91.67
Explanation / Answer
First of all the image quality is very poor, almost unreadable.
As per concept, If there is an adjustment, there must be two entries relating to that adjustment.
As interest payable was not recognised in the trial balance and through adjustment, there is an Interest expense of $136.11 for the year, Therefore we should debit Interest Expense. Now the interest expenditure was not paid at the end of the year then a corresponding credit entry of payable should be entered in the books, so interest payable will be credited with $136.11
So the answer is B.
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