Wisdom Co.has a note payable to its bank.An adjustment is likely to be required on Wisdom's books at the end of every month that the loan is outstanding to record the:
A)amount of interest paid during the month.
B)amount of total interest to be paid when the note is paid off.
C)amount of principal payable at the maturity date of the note.
D)accrued interest expense for the month.

Question

Quizplus · Accepted Answer

An adjustment is required to record the accrued interest expense for the month, as interest accumulates over time and needs to be recognized in the financial statements monthly.

Wisdom CoHas a Note Payable to Its Bank