Owl Company calculates that interest of $5,400 has accrued at December 31 on outstanding notes payable. How should Owl record this on December 31?

Name: Owl Company calculates that interest of $5,400 has accrued at December 31 on outstanding notes payable. How should Owl record this on December 31?
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Question

Quizplus · Accepted Answer

Interest expense for the month of December must be recognized as expense. A liability (payable) must be recorded since the amount has not yet been paid.

Owl Company Calculates That Interest of $5,400 Has Accrued at December