Use the Information from Cen, Inc -Which Statement Is True Concerning Cen's Interest?
A)Cen Paid a

question 9

Multiple Choice

Use the information from Cen, Inc. to answer questions
Cen, Inc. reported the following on its December 31, 2017, balance sheet:
$\begin{array}{lrr}\text { Current liabilities: }&2017&2016\\\hline \text { One-year short-term notes payable, net of discount of } & \$ 9,800 & \$ 6,400 \\\quad \$ 300 \text { and } \$ 400 \text {, respectively } & & \\\text { Accrued interest on notes payable } & 340 & 280 \\\text { Current portion of long-term debt } & 1,250 & 2,340 \\\text { Trade accounts pavable } & 500 & 700\end{array}$

-Which statement is true concerning Cen's interest?

• A)Cen paid a total of $60 interest during 2017.
• B)Interest was incurred during the year on more than one note.
• C)Interest of $3,200 was accrued and paid during 2017.
• D)The 'accrued interest on notes payable' amount relates only to the one-year short-term notes payable.

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Definitions:

Defective Instrument

A legal or financial document that contains errors, omissions, or flaws rendering it invalid or ineffective.

Dishonor

To refuse to accept or pay a draft or a promissory note when it is properly presented. An instrument is dishonored when presentment is properly made and acceptance or payment is refused or cannot be obtained within the prescribed time.

Handwriting

The act or practice of writing done with the hand, using instruments such as a pen or pencil, which can be unique to each individual.

Validity

Refers to the legal effectiveness and enforceability of a contract or legal document.