The Amount of Interest Paid in Cash for the Period

Multiple Choice

The amount of interest paid in cash for the period May to August is $1,000. However, the financial reports show interest expense for the period as $750. The difference is recorded in the statement of financial position as:

A) prepaid interest (liability) .
B) accrued interest (liability) .
C) accrued interest (asset) .
D) prepaid interest (asset) .