Question

A company reported interest expense of $590,000 for the year. Interest payable was $28,000 and $68,000 at the beginning and the end of the year, respectively. What was the amount of interest paid?

Selected information from Peridot Corporation's accounting records and financial statements for 2016 is as follows ($ in millions):
Cash paid to acquire machinery $31
Retired common stock 58
Proceeds from sale of land 94
Gain from the sale of land 46
Investment revenue received 75
Cash paid to acquire office equipment 85
In its statement of cash flows, Peridot should report net cash outflows from investing activities of:

Answer 1

The amount of interest paid is $550,000.

Step-by-step explanation:

To calculate the amount of interest paid, we need to consider the change in interest payable from the beginning to the end of the year. Interest expense is the total interest recorded for the year, while interest payable represents the amount of interest that is owed but hasn't been paid yet. The formula to calculate interest paid is:

Interest Paid = Interest Expense + Beginning Interest Payable - Ending Interest Payable

Plugging in the given values:

Interest Paid = $590,000 + $28,000 - $68,000 = $550,000

Therefore, the amount of interest paid is $550,000.