A Company Pays $9,000 in Interest on Notes Consisting of $6,000

question 65

Multiple Choice

A company pays $9,000 in interest on notes consisting of $6,000 of interest that was accrued during the last accounting period and $3,000 of interest that accumulated during this accounting period that has not yet been accrued on the books.The journal entry for the interest payment should:

• A)debit Interest Expense $9,000 and credit Cash $9,000.
• B)debit Cash $9,000 and credit Interest Payable $9,000.
• C)debit Interest Expense $3,000,debit Interest Payable $6,000,and credit Cash $9,000.
• D)debit Interest Payable $6,000,debit Accrued Interest $3,000,and credit Cash $9,000.

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Definitions:

Statement of Changes in Equity

A financial statement that shows the changes in a company’s equity over a reporting period.