During 2014, the Cash Flows Related to Global Data, Inc

question 157

Multiple Choice

During 2014, the cash flows related to Global Data, Inc.'s lending and borrowing activities are summarized as follows:
$\begin{array} { | l | r | } \hline \text { Cash lent to borrowers } & \$ 132,600 \\\hline \text { Payment to retire bonds payable } & \$ 367,500 \\\hline \text { Proceeds from borrowing at bank (note payable) } & \$ 220,500 \\\hline \text { Interest received from borrowers } & \$ 31,500 \\\hline \text { Interest payments made on bonds payable } & \$ 42,000 \\\hline\end{array}$

-If Global Data's income statement for 2014 reports interest expense of $25,200, then:

• A) Interest payable decreased by $16,800 in 2014.
• B) Interest payable increased by $16,800 in 2014.
• C) Interest payable at the end of 2013 amounts to $16,800.
• D) Either the amount reported in the income statement or the interest payment shown above must be incorrect.

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