Respuesta :
The appropriate choice is option (a). i.e., Debit interest expense, $198; credit interest payable, $198.
What exactly is accumulated interest?
Accumulated interest is the term used in accounting to describe the amount of interest that had already accrued as of a certain date on a loan or other financial obligation but had not yet been paid out. Both the lender and the borrower may incur accumulated interest in the form of accrued interest revenue or expense.
The following is the note's adjusting entry for accumulated interest as of December 31:
Debit interest expense $198
Credit interest payable $198
The note's principal and interest as of March 1 totaled $10,296.
Interest Expense= Principal * Interest Rate * Time
Interest Expense= $9,900 * 0.12 * 120/360= $396
Maturity Value= Principal + Interest Expense
Maturity Value= $9,900 + $396= $10,296
How are accumulated interest amounts handled?
A credit is made to the account for accumulated liabilities and a debit is made to the account for interest expenditure when interest is owed by the person who is responsible for the payment. As a short-term liability, the obligation is added to the balance sheet, and interest expense is shown on the income statement.
Learn more about accrued interest: https://brainly.com/question/3768813
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