A Company Pays $18,000 in Interest on Notes,consisting of $12,000

question 28

Multiple Choice

A company pays $18,000 in interest on notes,consisting of $12,000 interest that was accrued during the last accounting period and $6,000 of interest that accumulated during the current accounting period but has not yet been accrued on the books.The journal entry for the interest payment should:

• A)debit Interest Expense for $18,000 and credit Cash for $18,000.
• B)debit Cash for $18,000 and credit Interest Payable for $18,000.
• C)debit Interest Expense for $6,000,debit Interest Payable $12,000 and credit Cash for $18,000.
• D)debit Interest Payable for $12,000,debit Accrued Interest $6,000 and credit Cash for $18,000.

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Definitions:

Proxy

Authorization to represent a corporate shareholder to serve as his or her agent and vote his or her shares in a certain manner.

Greater-Than-Majority Vote

A voting requirement in decision-making processes that necessitates more than 50% of the votes to pass a motion or make a decision.

Unanimous Vote

A voting result where all participants agree on the decision or option presented without any dissent.

Shareholder Proxies

Legal authorizations granted by shareholders for someone else, often a board member, to vote on their behalf at company meetings.