A Company Has a Loan That Accrues Interest at a Rate

question 117

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 Loans Payable and credit Cash.
• C)Debit Interest Expense and credit Interest Payable.
• D)Debit Cash and credit Loans Payable.

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