The amount of a current liability reported on the balance sheet for interest payable includes
A)all interest to be paid within one year into the future related to amounts borrowed in past transactions.
B)all interest to be paid in the future related to amounts borrowed in past transactions.
C)all interest currently owed related to amounts borrowed in past transactions.
D)all interest paid-to-date related to amounts borrowed in past transactions.

Question

Quizplus · Accepted Answer

The amount of a current liability reported on the balance sheet for interest payable includes all interest currently owed related to amounts borrowed in past transactions. This amount represents the interest that has accumulated on a loan or bond since the last interest payment date and will be paid in the future.

The Amount of a Current Liability Reported on the Balance