Question

The beginning balance of Prepaid Interest was $5,400 and the ending balance was $7,800. The Interest...

The beginning balance of Prepaid Interest was $5,400 and the ending balance was $7,800. The Interest Expense account for the year was $25,800.  

How much cash was paid for interest?

Select one:

A. $28,200

B. $24,300

C. $25,800

D. $23,400

Business   Accounting   
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Homework Answers

Answer #1

Answer)

Calculation of Amount of cash paid for interest

Cash paid for interest = Beginning balance of prepaid interest + Interest expense for the year – Ending balance of prepaid interest

                                         = $ 5,400 + $ 25,800 - $ 7,800

                                         = $ 23,400

Therefore amount of cash paid for interest is $ 23,400 and the correct option in the given question is (D)    

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