Question

The Keweenaw Sunshine Development Corporation reported the following for the year ended December 31, 2018: 1/1/18 12/31/18 Discount on Bonds Payable $ 17,500 $ 15,750 Interest Payable $ 19,500 $ 17,350 Interest Expense $47,750 How much cash did Keweenaw pay for interest during 2018

Answer 1

Answer:

$49,000

Explanation:

To calculate the amount of cash Keweenaw pay for interest during 2018, the interest payable at 12/31/18 is subtracted from the addition of interest payable at 1/1/18 and interest expenses during the year as follows:

Amount of cash paid for interest = $19,500 + $47,750 - $17,350 = $49,900

Therefore, the amount of cash Keweenaw pay for interest during 2018 is $49,000.