A company pays $18,000 in interest on notes,consisting of $12,000 interest that was accrued during the last accounting period and $6,000 of interest that accumulated during the current accounting period but has not yet been accrued on the books.The journal entry for the interest payment should:
A)debit Interest Expense for $18,000 and credit Cash for $18,000.
B)debit Cash for $18,000 and credit Interest Payable for $18,000.
C)debit Interest Expense for $6,000,debit Interest Payable $12,000 and credit Cash for $18,000.
D)debit Interest Payable for $12,000,debit Accrued Interest $6,000 and credit Cash for $18,000.

Question

Quizplus · Accepted Answer

The journal entry includes a debit to Interest Expense for $6,000 (the amount accumulated during the current accounting period),a debit to Interest Payable for $12,000 (the amount that accrued during the last accounting period),and a credit to Cash for $18,000 (the total amount paid).

A Company Pays $18,000 in Interest on Notes,consisting of $12,000