Question

The company accrues interest on notes payable for January. When is the interest expected to be paid?

1) January 31
2) December 31
3) February 28
4) March 31

Answer 1

The interest accrued on notes payable for January is typically expected to be paid after the end of January, which would be February 28 among the given options.

Step-by-step explanation:

When a company accrues interest on notes payable for January, the expected time to pay this interest would typically be after the period the interest accrues. Given that the interest is for the month of January, it is expected to be paid after the accrual period, not on January 31. Usually, accrued interest on notes payable is paid on a subsequent date after the interest period ends. Therefore, among the provided options, the interest is expected to be paid on February 28, as it is the end of the month following January, which is the month when the activity took place that led to the accrual of interest.