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Multiple choice: 1. The business borrowed ₱1M from the bank. At maturity date, the business pays the bank ₱1.4M to settle the loan. The ₱.4M difference between the settlement amount and the principal (i.e., 1.4M – 1M = .4M difference) is recorded as A. Notes payable B. Prepaid rent. C. Interest expense. D. Utilities expense

Multiple choice: 1. The business borrowed ₱1M from the bank. At maturity date, the business pays the bank ₱1.4M to settle the loan. The ₱.4M difference between the settlement amount and the principal (i.e., 1.4M – 1M = .4M difference) is recorded as A. Notes payable B. Prepaid rent. C. Interest expense. D. Utilities expense

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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Multiple choice: 1. The business borrowed ₱1M from the bank. At maturity date, the business pays the bank ₱1.4M to settle the loan. The ₱.4M difference between the settlement amount and the principal (i.e., 1.4M – 1M = .4M difference) is recorded as A. Notes payable B. Prepaid rent. C. Interest expense. D. Utilities expense 2. Which of the following is most likely not considered an adjusting entry? A. The entry to record the collection of interest receivable B. The accrual of an electricity bill for electricity used but not yet paid C. The recognition of depreciation expense for the period D. The recognition of the used and unused portions of a prepaid rent
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