On July 1,2013,Avery Services Issued a 4% Long-Term Note Payable $$\begin{array} { | l | r | r | } \hline \text { Interest expense } & 200 & \\\hline \text { Cash } & & 200 \\\hline\end{array}$$

question 80

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.
-Which of the following entries needs to be made at year-end 2013 to accrue interest?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Interest expense } & 200 & \\
• \hline \text { Cash } & & 200 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Interest expense } & 200 & \\
• \hline \text { Interest payable } & & 200 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Interest expense } & 400 & \\
• \hline \text { Accounts payable } & & 400 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Interest revenue } & 400 & \\
• \hline \text { Cash } & & 400 \\
• \hline
• \end{array}\]

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Definitions:

Goal Theory

A psychological framework that focuses on the motivational aspects of goal setting and achievement.

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An encouragement to exert maximum effort and strive for the highest level of performance or achievement in any endeavor.

Listening

The active process of receiving and understanding messages communicated by others.

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