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Interpret the following journal entry: Interest expense 500 Cash 500 O a. The company took out a loan for $500. O b. The company has an outstanding loan payable that requires payment of interest only at the loan's maturity date. Oc. The company has an outstanding loan payable that requires payment of interest every period. O d. The company has repaid an outstanding loan of $500.

Interpret the following journal entry: Interest expense 500 Cash 500 O a. The company took out a loan for $500. O b. The company has an outstanding loan payable that requires payment of interest only at the loan's maturity date. Oc. The company has an outstanding loan payable that requires payment of interest every period. O d. The company has repaid an outstanding loan of $500.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 6?
What is the account classification for Cash? O a. Llability Ob.Asset O c. Owners' Equity O d. Contra-asset QUESTION 6 Interpret the following journal entry: Interest expense 500 Cash 500 O a. The company took out a loan for $500. O b. The company has an outstanding loan payable that requires payment of interest only at the loan's maturity date. Oc. The company has an outstanding loan payable that requires payment of interest every period. O d. The company has repaid an outstanding loan of $500. QUESTION 7 d cubmit Click Save All Answers to save all answers.
Transcribed Image Text:What is the account classification for Cash? O a. Llability Ob.Asset O c. Owners' Equity O d. Contra-asset QUESTION 6 Interpret the following journal entry: Interest expense 500 Cash 500 O a. The company took out a loan for $500. O b. The company has an outstanding loan payable that requires payment of interest only at the loan's maturity date. Oc. The company has an outstanding loan payable that requires payment of interest every period. O d. The company has repaid an outstanding loan of $500. QUESTION 7 d cubmit Click Save All Answers to save all answers.
Expert Solution
Step 1

Accounting Rules
(1) Debit what comes in, Credit what goes out.
(2) Debit all expenses and losses, Credit all incomes and gains.
(3) Debit the receiver, Credit the giver
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