Question

Interest expense that has accrued on a note payable will be recorded in the Interest Payable account. When the interest is paid in a future period, the Interest Payable account will be reduced.

a)True
b)False

Answer 1

The interest expense accrued on a note payable will be recorded in the Interest Payable account, which will be reduced when the interest is paid in a future period.

Step-by-step explanation:

The statement is true. When interest expense accrues on a note payable, it is recorded in the Interest Payable account. This account represents the amount of interest that the company owes but has not yet paid. When the interest is eventually paid in a future period, the Interest Payable account will be reduced to reflect the payment.