Accrued interest on a short-term note payable is recorded by:
A) debiting Cash and crediting Interest Payable
B) debiting Interest Payable and crediting Cash
C) debiting Interest Payable and crediting Interest Expense
D) debiting Interest Expense and crediting Interest Payable

Question

Quizplus · Accepted Answer

Accrued interest on a short-term note payable is recorded by increasing (debiting) Interest Expense for the cost of borrowing over the period and increasing (crediting) Interest Payable to reflect the liability for the interest that has accrued but not yet been paid.

Accrued Interest on a Short-Term Note Payable Is Recorded By