BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

When a note payable is paid at maturity, what account is debited for the amount of the interest?

  1. (a) Interest Revenue
  2. (b) Notes Payable
  3. (c) Interest Expense
  4. (d) Discount on Notes Payable

To determine

Identify the account that is debited for the account of the interest if a note payable is paid at maturity.

Explanation

Notes payable:

Notes payable is a written promise to make payment for specific sum at a certain future date that includes component of interest.

Justification for the incorrect options of (a), (b) and (d):

Interest revenue is a component of shareholders equity it will increase the shareholders’ equity. Hence, it is not correct option.

Notes payable is a liability and discount on notes payable account is a contra liability. These accounts are not debited for the interest expense if payment for note payable is made at maturity...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the two main causes of market failure? Give an example of each.

Principles of Microeconomics (MindTap Course List)

(Costs in the Short Run) Identify each of the curves in the following graph:

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

Define manufacturing overhead.

Managerial Accounting: The Cornerstone of Business Decision-Making

Define chart of accounts and identify the categories of accounts.

College Accounting (Book Only): A Career Approach

Discuss the pros and cons of having the directors formally announce a firms future dividend policy.

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)