The Adjustment Dated 12/31/20x1 to Accrue Interest to Be Paid

question 105

Multiple Choice

The adjustment dated 12/31/20x1 to accrue interest to be paid most likely would be reversed by which of the following entries?

• A)Debit Interest Payable and credit Interest Expense dated 1/1/20x2
• B)Debit Interest Expense and credit Interest Payable dated 12/31/20x1
• C)Debit Interest Payable and credit Interest Expense dated 12/31/20x1
• D)Debit Interest Expense and credit Interest Payable dated 1/1/20x2

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Definitions:

Entitlement

The right to benefit from assets or services, such as dividends for shareholders or leave benefits for employees.

Jointly Controlled Entity

An entity that is operated and controlled through a contractual arrangement between two or more parties who have joint control.

AASB 11

An accounting standard issued by the Australian Accounting Standards Board that outlines the reporting requirements for parties involved in joint arrangements.

Joint Operation

A business activity owned and managed by two or more parties that share control, resources, and obligations directly.