Indirect Personnel,Inc

question 101

Multiple Choice

Indirect Personnel,Inc.obtained a $20,000 note payable on August 1,2012,that is due in 5 years.Interest,at an annual rate of 12%,will be paid once a year on July 31.The accountant made the appropriate journal entry on August 1,2012.No other journal entry has been made.What journal entry is necessary as of December 31,2012?

• A)Debit Interest Expense and credit Notes Payable for $1,000
• B)Debit Interest Expense and credit Notes Payable for $2,400
• C)Debit Interest Expense and credit Interest Payable for $1,000
• D)Debit Interest Expense and credit Interest Payable for $2,400
• E)Debit Interest Expense and credit Interest Receivable for $2,400

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Definitions:

Leader

An individual who guides or directs a group towards achieving set objectives by motivating, influencing, and providing direction.

Open-Book Management

An approach to management in which every employee is trained, empowered, and motivated to understand and pursue the company’s business goals.

Strategic Decision

A significant choice made by top-level management that sets the direction and influences the future success of an organization.

Pre-Existing Idea

A concept, belief, or opinion that was formed before the current context or situation.