Recognizing accrued interest expense
Classic Corporation borrowed $90,000 from the bank on November 1, 2012. The note had an 8 percent annual rate of interest and matured on April 30, 2013. Interest and principal were paid in cash on the maturity date.
Â a. What amount of interest expense was paid in cash in 2012?
Â b. What amount of interest expense was reported on the 2012 income statement?
Â c. What amount of total liabilities was reported on the December 31, 2012, balance sheet?
Â d. What total amount of cash was paid to the bank on April 30, 2013, for principal and interest?
Â e. What amount of interest expense was reported on the 2013 income statement?