Question

During the current year, Hainzel Corp.'s income statement shows that the company accrued interest expense of 5,000; for the same period the interest payable balance decreased by 300. Cash paid for interest is?

Answer 1

The cash paid for interest by Hainzel Corp. is the sum of the accrued interest expense and the decrease in interest payable, totaling $5,300.

Step-by-step explanation:

The student is asking about how to determine the cash paid for interest by Hainzel Corp. during the current year, given the accrued interest expense and the change in interest payable balance. To find the cash paid for interest, you need to adjust the interest expense for the change in the related payable account.

In this case, the company accrued an interest expense of $5,000, and the interest payable decreased by $300. Therefore, the cash paid for interest can be calculated by adding the decrease in interest payable to the interest expense, which gives us $5,000 + $300 = $5,300.