PROBLEM 6: MULTIPLE CHOICE 1. Entity A obtained a 12%, P100,000, one-year loan on October 1, 20x1. On October 1, 20x2, Entity A paid the lender P112,000, PRODiy A obtained a 12%, P100,000, one-year loan on October 1, 201 On October 1, 20x2, Entity A paid the lender 112,000, representing settlement of both the principal and interest on she loan. The P12,000 total interest should be recognized as interest expense c. partly in 20x1 and partly in 20x2. d. Not recognized as expense a. in 20x1. b. in 20x2.
PROBLEM 6: MULTIPLE CHOICE 1. Entity A obtained a 12%, P100,000, one-year loan on October 1, 20x1. On October 1, 20x2, Entity A paid the lender P112,000, PRODiy A obtained a 12%, P100,000, one-year loan on October 1, 201 On October 1, 20x2, Entity A paid the lender 112,000, representing settlement of both the principal and interest on she loan. The P12,000 total interest should be recognized as interest expense c. partly in 20x1 and partly in 20x2. d. Not recognized as expense a. in 20x1. b. in 20x2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![representing settlement of both the principal and interest on
PROBLEM 6: MULTIPLE CHOICE
PRODihy A obtained a 12%, P100,000, one-year loan on October 1,
20x1, On October 1, 20x2, Entity A paid the lender P112,000,
the loan. The P12,000 total interest should be recognized as
interest expense
c. partly in 20x1 and partly in 20x2.
d. Not recognized as expense
a. in 20x1.
b. in 20x2.
2. The instance described in #1 above is an application of which
of the following accounting concepts?
c. Matching
d. a and b
a. Accrual
b. Time period](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0556f94c-9f02-4cba-b96f-c35bf2e5169c%2Fb75ece92-dff3-46c7-b265-675b59fac638%2Fa41zjzb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:representing settlement of both the principal and interest on
PROBLEM 6: MULTIPLE CHOICE
PRODihy A obtained a 12%, P100,000, one-year loan on October 1,
20x1, On October 1, 20x2, Entity A paid the lender P112,000,
the loan. The P12,000 total interest should be recognized as
interest expense
c. partly in 20x1 and partly in 20x2.
d. Not recognized as expense
a. in 20x1.
b. in 20x2.
2. The instance described in #1 above is an application of which
of the following accounting concepts?
c. Matching
d. a and b
a. Accrual
b. Time period
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