The Interest Expense in the worksheet's unadjusted trial balance column is $3,500.Interest Expense in the income statement column is $14,000.Which of the following entries would have caused this difference?
A)a $14,000 credit to Interest Expense in the worksheet's adjustments column
B)a $14,000 credit to Interest Payable in the worksheet's adjustments column
C)a $10,500 debit to Interest Expense in the worksheet's adjustments column
D)a $10,500 credit to Interest Expense in the worksheet's adjustments column

Question

Quizplus · Accepted Answer

The difference between the unadjusted trial balance column and the income statement column for Interest Expense is $10,500 ($14,000 - $3,500). This means that there must have been $10,500 worth of interest expense that was not recorded in the unadjusted trial balance. To correct this, a $10,500 debit to Interest Expense should be made in the adjustments column of the worksheet to reflect the additional interest expense that was incurred but not recorded. Option A would lead to an overstatement of interest expense, Option B would not affect interest expense, and Option D would decrease interest expense, making the difference even greater. Therefore, Option C is the correct choice.

The Interest Expense in the Worksheet's Unadjusted Trial Balance Column