Question

Ellis Travel records an $800,000 loan for upgraded computers and software for the entire company in a Notes Payable account. The loan has an interest rate of 5.5%, which is recorded in the Interest Payable account before it is paid. The Interest Payable account would be considered a(n) ________ account.A: contra

B: secondary
C: supplementary
D: adjunct

Answer 1

D: adjunct

Step-by-step explanation:

For notes payables, the total amount will be the 800,000 principal plus the accrued interest. These will be the book value of the liability at year-end

For reason that the interest ae exigible in a period lower than a year, they will be posted as current while the note payable as long.term debt.