[Marco]

I am so confused with the concept of accruing interest expense and interest payable at year end (12/31)

1) Bonds issued at a discount, interest payable on 3/31 and 9/30.
Do I have to accrue interest and record interest payable on December 31 year end?

2) $200,000, 10% interest bearing note, borrowed July 1 of current year, due January 2 of next year; proceeds $178,000.
Do I need to accrue interest expense and record a interest payable at year end?

2) $200,000, noninterest bearing note, borrowed July 1 of current year, due January 2 of next year; proceeds $178,000.
Do I need to accrue interest expense and record a interest payable at year end?

3) Capital leases. Payment on January 1st each year.
Do I need to accrue interest expense and interest payable on 12/31 or I should record expense when I make the payment?

AUD - 93
BEC - 86
FAR - 93
REG - 94

Marco

[CoachEmUp]

Yes Yes Yes and Yes. Always record accrued interest expense at year end. Matching concept… You accrued it so you should record it.

Licensed CPA in Michigan

Used Wiley CPA Excel Throughtout
FAR- 90 (7/17)
AUD- 89 (8/17)
REG- 92 (10/17)
BEC- 94 (11/17)

[Author]

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