Which of the following occurs when a company records accrued interest expense on a loan payable?
A)Loan payable is credited.
B)Cash is debited.
C)Interest payable is credited.
D)Interest expense is credited.

Question

Quizplus · Accepted Answer

When a company records accrued interest expense on a loan payable, the interest payable account is credited. This reflects the company's obligation to pay the interest in the future. The corresponding debit entry would typically be made to interest expense, as this represents the cost of the loan for the period in question. There would be no impact on the loan payable account, as this represents the principal amount owed and not the interest expense. Cash would not be debited in this scenario, as the payment of the interest expense would occur at a later date.

Which of the Following Occurs When a Company Records Accrued