On July 1,2013,Avery Services Issued a 4% Long-Term Note Payable

question 100

Multiple Choice

On July 1,2013,Avery Services issued a 4% long-term note payable for $10,000.It is payable over a 5-year term in $2,000 principal installments on July 1 of each year.Each yearly installment will include both principal repayment of $2,000 and interest payment for the preceding one-year period.
-What happens on December 31,2013 before statements are prepared?

• A) Avery must accrue $200 of interest expense.
• B) Avery must accrue for the coming $2,000 principal payment.
• C) Avery must pay out $200 of interest expense to the note holder.
• D) Avery does not need to take any actions.

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Definitions:

Lineation

A linear feature within rock, such as grain elongation or mineral stretching, that indicates flow or movement directions during formation.

Elongated Mineral

A mineral shape characterized by being significantly longer in one direction than in the others, common in some types of crystals.

Ductile Shearing

Ductile shearing is the deformation of materials through stretching or shearing, allowing them to bend and shape without breaking, often in geological contexts.

Hornfels

A fine-grained metamorphic rock formed by the contact metamorphism of shale and other clay-rich rocks.