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22 June, 04:12

In its 20X3 financial statements, Cris Co. reported interest expense of $85,000 in its income statement and cash paid for interest of $68,000 in its cash flow statement. There was no prepaid interest or interest capitalization either at the beginning or end of 20X3. Accrued interest at December 31, 20X2, was $15,000. What amount should Cris report as accrued interest payable in its December 31, 20X3, balance sheet?

a) $2,000b) $15,000c) $17,000d) $32,000

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  1. 22 June, 04:41
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    The answer is: D) $32,000

    Explanation:

    In 20x3, Cris. Co. paid in cash $68,000 for interest, including $15,000 of interest from 20x2.

    The amount of cash paid for 20x3 interests = $68,000 - $15,000 = $53,000

    Interest payable = interest expense 20x3 - cash paid for 20x3 interests

    interest payable = $85,000 - $53,000 = $32,000
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