The Journal Entry to Record Accrued Interest on a Short-Term

question 12

Multiple Choice

The journal entry to record accrued interest on a short-term note payable must include a debit to:

• A)Interest Expense and a credit to Notes Payable.
• B)Interest Expense and a credit to Interest Payable.
• C)Interest Payable and a credit to Interest Expense.
• D)Interest Payable and a credit to Notes Payable.

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Definitions:

Cash Price

The actual price a buyer pays in cash at the time of purchase, as opposed to credit purchase terms.

Hedge Position

An investment made to reduce the risk of adverse price movements in an asset, usually through derivatives like options or futures contracts.

Bushels

A unit of volume measurement used primarily in agriculture, particularly in the United States, for grains and other dry commodities.