Interest payable on a loan becomes a liability
A)when the borrowed money is received.
B)when the note payable is issued.
C)at the maturity date.
D)as it accrues.

Question

Quizplus · Accepted Answer

Interest payable on a loan becomes a liability as it accrues, meaning it is recognized as a liability over time as it continues to accumulate until it is paid. Therefore, the correct answer is D, as the other options do not accurately reflect the timing of when the liability is recognized.

Interest Payable on a Loan Becomes a Liability