Answered: shows an Interest Expense balance of…

shows an Interest Expense balance of $500 On August 31, 2020, the company borrowed $5,000 with an annual interest rate of 6% for 15-month. The adjusted balance of "Interest Expense" is:

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 5MCQ: Dallas Company loaned to Ewing Company on December 1, 2019. Ewing will pay Dallas $720 of interest...

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Question

Kay Company prepares its financial
statements yearly. The company's
unadjusted trial balance of the year 2020
shows an Interest Expense balance of $500.
On August 31, 2020, the company borrowed
$5,000 with an annual interest rate of 6%
for 15-month. The adjusted balance of
"Interest Expense" is: *
O $425
O $600
$625
None of the options

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