Question

The Interest Expense in the worksheet's unadjusted trial balance column is $3,500. Interest Expense in the income statement column is $9,000. Which of the following entries would have caused this difference?

A. a $5,500 credit to Interest Expense in the worksheet's adjustments column
B. a $9,000 credit to Interest Expense in the worksheet's adjustments column
C. a $9,000 credit to Interest Payable in the worksheet's adjustments column
D. a $5,500 debit to Interest Expense in the worksheet's adjustments column
E. None of the above

Answer 1

The $5,500 increase in Interest Expense from the worksheet's unadjusted trial balance to the income statement column is due to a $5,500 debit to Interest Expense in the adjustments column, matching option D.

Step-by-step explanation:

If the Interest Expense in the unadjusted trial balance column is $3,500 and the Interest Expense in the income statement column is $9,000, it indicates that an adjustment was made to increase the Interest Expense by $5,500 to reach the $9,000 figure on the income statement. This would match option D, which is a $5,500 debit to Interest Expense in the worksheet's adjustments column.

To reflect this in accounting terms, an adjusting entry would be written as:
Debit Interest Expense $5,500
Credit Interest Payable $5,500
This records the additional expense that has been incurred but not yet paid during the period.