Bookkeeper Certification Practice Test & Exam Prep

Interest of $640 was incurred by month-end but will not be paid until January 5. What adjusting entry is required?

Debit Interest Expense $640 and credit Accrued Expenses Payable $640 Debit Cash $640 and credit Interest Expense $640 Debit Prepaid Interest $640 and credit Cash $640 Debit Accrued Expenses Payable $640 and credit Interest Expense $640

Correct Answer:

Debit Interest Expense $640 and credit Accrued Expenses Payable $640

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