Unquiet Hands, Inc $$\begin{array} { | l | c | } \hline \text { Dr. } & \text { Iriterest payable } \\\hline \text { Cr. } & \text { Cash } \\\hline\end{array}$$

question 21

Multiple Choice

Unquiet Hands, Inc.borrowed $30,000 on October 1, 2019 at 6% interest with both principal and interest due on September 30, 2020.Which of the following journal entries should the firm use to accrue interest at the end of each month?

• A) \[\begin{array} { | l | c | }
• \hline \text { Dr. } & \text { Iriterest payable } \\
• \hline \text { Cr. } & \text { Cash } \\
• \hline
• \end{array}\]
• B) \(\begin{array}{|c|c|}
• \hline \text { Dr. } & \text { Interest receivable } \\
• \hline \mathrm{Cr} . & \text { Interest payable } \\
• \hline
• \end{array}\)
• C) \(\begin{array}{|l|l|}
• \hline \text { Dr. } & \text { Interest expense } \\
• \hline \mathrm{Cr} . & \text { Interest payable } \\
• \hline
• \end{array}\)
• D) \(\begin{array}{|l|l|}
• \hline \text { Dr. } & \text { Interest payable } \\
• \hline \mathrm{Cr} . & \text { Interest expense } \\
• \hline
• \end{array}\)

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