5) When a business records accrued interest expense on a note payable A) Interes

Question

5) When a business records accrued interest expense on a note payable A) Interest Payable is credited 5) B) Cash is debited D) Note Payable is credited 6) Rosewood, Inc. recently signed a $356,000, six-month note on August 22, 2017. The interest rate is 6) 12.5%. How much interest will be due at maturity? A) $22,250 B) $18,542 C) $44,500 D) $14,833 7) Rocco earns $19.00 per hour for straight time (40 hours), and the company pays him time-and-a-half for overtime. He worked 49 hours at his job during the first week of March 2017. What was Rocco's gross pay for the week? A) $935.50 B) $931.00 C) $1,016.50 D) $1,396.50 8) Regarding gross and net pay, which of the following statements is correct? A) For most businesses, gross pay equals net pay. B) Employers are required to deposit net pay into the employee's bank account. C) Gross pay minus all deductions such as income tax withheld equals net pay. D) Net pay represents the total salaries and wages expense to the employer ) Aaron earns $18.50 per hour with time-and-a-half for hours in excess of 40 per week. He wo 45 hours at his job during the first week of March 2017, Aaron pays income taxes at 15% and for OASDI and Medicare. All of his income is taxable under FICA. Determine Aaron's net pa the week. (Do not round any intermediate calculations, and round your final answer to the cent.) B) $746.94 C) $579.84 D) $679.7 A) $616.51

Explanation / Answer

5. Option A:

Interest payable is credited.

Explanation:

When accrued interest expense is recorded, a liability account is created which is interest payable. This will be paid in future. When this is paid then interest payable is debited and cash is credited.

6. Option A

$22,250

Explanation:

Interest =356,000×12.5%×6/12

=$22,250

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