A Company Has a Loan That Accrues Interest at a Rate

question 45

Multiple Choice

A company has a loan that accrues interest at a rate of $20 a day.The company pays the interest once a quarter.Which of these would be an accurate adjustment for a month in which no payments are made?

• A)Debit Interest Payable and credit Interest Expense.
• B)Debit Notes Payable and credit Cash.
• C)Debit Interest Expense and credit Interest Payable.
• D)Debit Cash and credit Notes Payable.

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Definitions:

Ambiguous

Something that can be understood in more than one way or is unclear because of having multiple interpretations.

Interest-Based Negotiation

Negotiation focused on the underlying interests and needs of the parties, rather than fixed positions.

Clarifications

The process of making something clearer or easier to understand by explaining it further or providing more details.

Cases Included

Instances or examples that are considered or taken into account in a particular situation or analysis.