The Journal Entry for Accrued Interest on a Note Payable

question 72

Multiple Choice

The journal entry for accrued interest on a note payable includes ________.

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

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Definitions:

Trustee

An individual or organization appointed to manage and administer property or assets on behalf of others, often in the context of a trust or bankruptcy.

Debtor

An individual or entity that owes money to another entity or individual.

Debtor in Possession

A business entity that retains control of its assets and continues operations while undergoing a reorganization under bankruptcy laws.

Trustee Functions

The roles and responsibilities carried out by a trustee, typically involving managing assets held in trust on behalf of beneficiaries.