Interest expense on a note payable, with interest due at maturity, is
A)always equal to zero.
B)accrued over the life of the note.
C)only recorded at the time the note is issued.
D)only recorded at maturity when the note is paid.

Question

Quizplus · Accepted Answer

Interest expense on a note payable, with interest due at maturity, is accrued over the life of the note. This means that even though the interest payment is not made until maturity, the expense is recognized periodically in the financial statements to match the expense with the period in which it is incurred, following the matching principle of accounting.

Interest Expense on a Note Payable, with Interest Due at Maturity