Chapter 4, Problem 20Q

To determine

Accounting Cycle: Accounting cycle refers to the process of preparing the books of accounts of an organization. It starts with identifying an event to enter the transaction in the books and ends with closing of the books.

Reversing Entry: The reversing entries are the contra entries of the original journal entries. These are generally made at the beginning of reporting period.

Adjusting Entries: Adjusting entries are passed at the end of the accounting period to maintain the accounts on accrual basis. These entries are passed in order to adjust the amounts of incomes and expenses in the accounting period in which they are actually earned and incurred respectively.

To determine: The type of account balance if any will there be in interest payable and interest expense account when the adjusting entry for interest payable is reversed.