Comet Corporation's Liability Account Balances at June 30, 2011, Included

question 34

Multiple Choice

Comet Corporation's liability account balances at June 30, 2011, included a 10 percent note payable. The note is dated October 1, 2009, and carried an original principal amount of $600,000. The note is payable in three equal annual payments of $200,000 plus interest. The first interest and principal payment was made on October 1, 2010. In Comet's June 30, 2011, balance sheet, what amount should be reported as Interest Payable for this note?

• A) $10,000
• B) $15,000
• C) $30,000
• D) $45,000

---

Definitions:

Cumulative Preferred Stockholders

Investors holding a type of preferred stock that accumulates dividends in arrears should the dividends not be declared in any given period.

Non-Participating

Refers to insurance policies or investment products that do not provide dividends or bonuses to policyholders or investors.

Yearly Dividend

The total dividend payment a company offers to its shareholders annually, which can be a sign of the company's profitability and financial health.

Common Stock

A form of corporate equity ownership, a type of security representing holding a portion of a company.