Indicate Whether Each of the Following Statements Is True or False

Short Answer

Indicate whether each of the following statements is true or false.
_____ a) An eight month, 6% note for $20,000 will require the issuer to pay $1,200 in interest.
_____ b) Interest expense is not considered an operating expense on the income statement.
_____ c) Payment of interest is considered an operating activity on the statement of cash flows.
_____ d) Payment of interest on a one-year note due on March 1 will include a reduction in liabilities.
_____ e) The adjusting entry to recognize interest expense is an asset use transaction.