Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to accrue interest at the end of each month?

A.
$\begin{array}{llcc}
\text {Dr. Interest payable }\
\text { Cr. Cash } \
\end{array}$

B.
$\begin{array}{llcc}
\text {Dr. Interest receivable } \
\text { Cr. Interest payable } \
\end{array}$

C.
$\begin{array}{llcc}
\text {Dr. Interest expense } \
\text { Cr. Interest payable } \
\end{array}$

D.
$\begin{array}{llcc}
\text { Dr. Interest payable } \
\text { Cr. Interest expense} \
\end{array}$

Question

Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. Which of the following journal entries should the firm use to accrue interest at the end of each month?

A.
$\begin{array}{llcc}
  \text {Dr. Interest payable  }\
  \text { Cr. Cash } \
\end{array}$

B.
$\begin{array}{llcc}
  \text {Dr. Interest receivable  } \
 \text { Cr. Interest payable } \
\end{array}$

C.
$\begin{array}{llcc}
  \text {Dr. Interest expense  } \
  \text { Cr. Interest payable } \
\end{array}$

D.
$\begin{array}{llcc}
  \text { Dr. Interest payable  } \
  \text {  Cr. Interest expense} \
\end{array}$

Quizplus · Accepted Answer

The Answer is C

Martin & Associates Borrowed $5,000 on April 1, 2013 at 8