Interest payable on a loan becomes a liability:
A)When the note payable is issued.
B)As it accrues.
C)At the maturity date.
D)When the borrowed money is received.

Question

Quizplus · Accepted Answer

Interest payable on a loan is a liability that accrues over time as the loan is outstanding, so it becomes a liability as it accrues. It is not a liability when the note payable is issued, at the maturity date, or when the borrowed money is received.

Interest Payable on a Loan Becomes a Liability