When interest is accrued on a note payable, but not paid, the A. Interest Expense account is increased; the Interest Payable acc

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2 years ago

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When interest is accrued on a note payable, but not paid, the A. Interest Expense account is increased; the Interest Payable acc

ount is decreased. B. Notes Payable account is increased; the Interest Payable account is increased. C. Interest Expense account is increased; the Interest Payable account is increased. D. Interest Expense account is decreased; the Interest Payable account is increased.

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1 answer:

olchik [2.2K] · Answer 1 · 2022-07-03T12:58:24+03:00

Answer:

C. Interest Expense account is increased; the Interest Payable account is increased.

Explanation:

A secured interest can be defined as a legal right granted by a borrower to a lender (creditor) over a collateral (the borrower's property) which permits or allow the lender to have a right to possess the property as soon as the lender defaults in making payment. The payment which is expected to be made by the borrower of a mortgage loan is considered a secured obligation because it is a lien or an enforceable legal claim.

When interest is accrued on a note payable, but not paid, the Interest Expense account is increased; the Interest Payable account is increased.