ACC 231 EXAM FINAL PAPER 2026 COMPLETE
QUESTIONS AND SOLUTIONS
◉ On December 1, Year 1, Old World Deli signed a $300,000, 5%, six-
month note payable with the amount borrowed plus accrued
interest due six months later on June 1, Year 2. What amount of cash
will be needed to pay back the note payable plus any accrued
interest on June 1, Year 2? Answer: $307,500
◉ On November 1, Year 1, New Morning Bakery signed a $200,000,
6%, six-month note payable with the amount borrowed plus accrued
interest due six months later on May 1, Year 2. New Morning Bakery
should record which of the following adjusting entries at December
31, Year 1? Answer: Debit Interest Expense and credit Interest
Payable for $2,000
◉ On November 1, Year 1, New Morning Bakery signed a $200,000,
6%, six-month note payable with the amount borrowed plus accrued
interest due six months later on May 1, Year 2. The adjustment for
accrued interest on December 31, Year 1, results in an increase in
Interest Expense and a(n): Answer: increase in Interest Payable for
$2,000
◉ The Pita Pit borrowed $100,000 on November 1, Year 1, and
signed a six-month note bearing interest at 12%. Principal and
, interest are payable in full at maturity on May 1, Year 2. In
connection with this note, what is the amount of interest expense
that Pita Pit should report in its income statement for the year
ended December 31, Year 1? Answer: $2,000
◉ The Pita Pit borrowed $100,000 on November 1, Year 1, and
signed a six-month note bearing interest at 12%. Principal and
interest are payable in full at maturity on May 1, Year 2. In
connection with this note, The Pita Pit should report interest
expense in Year 2 for the amount of: Answer: $4,000.
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
Principal and interest are payable in full at maturity on October 31,
Year 2. What is the amount of interest payable that should be
reported by Universal Travel, Incorporated on December 31, Year 1?
Answer: $5,000
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
Principal and interest are payable in full at maturity on October 31,
Year 2. What is the amount of interest payable that should be
reported by Universal Travel, Incorporated on December 31, Year 2?
Answer: $0
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
QUESTIONS AND SOLUTIONS
◉ On December 1, Year 1, Old World Deli signed a $300,000, 5%, six-
month note payable with the amount borrowed plus accrued
interest due six months later on June 1, Year 2. What amount of cash
will be needed to pay back the note payable plus any accrued
interest on June 1, Year 2? Answer: $307,500
◉ On November 1, Year 1, New Morning Bakery signed a $200,000,
6%, six-month note payable with the amount borrowed plus accrued
interest due six months later on May 1, Year 2. New Morning Bakery
should record which of the following adjusting entries at December
31, Year 1? Answer: Debit Interest Expense and credit Interest
Payable for $2,000
◉ On November 1, Year 1, New Morning Bakery signed a $200,000,
6%, six-month note payable with the amount borrowed plus accrued
interest due six months later on May 1, Year 2. The adjustment for
accrued interest on December 31, Year 1, results in an increase in
Interest Expense and a(n): Answer: increase in Interest Payable for
$2,000
◉ The Pita Pit borrowed $100,000 on November 1, Year 1, and
signed a six-month note bearing interest at 12%. Principal and
, interest are payable in full at maturity on May 1, Year 2. In
connection with this note, what is the amount of interest expense
that Pita Pit should report in its income statement for the year
ended December 31, Year 1? Answer: $2,000
◉ The Pita Pit borrowed $100,000 on November 1, Year 1, and
signed a six-month note bearing interest at 12%. Principal and
interest are payable in full at maturity on May 1, Year 2. In
connection with this note, The Pita Pit should report interest
expense in Year 2 for the amount of: Answer: $4,000.
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
Principal and interest are payable in full at maturity on October 31,
Year 2. What is the amount of interest payable that should be
reported by Universal Travel, Incorporated on December 31, Year 1?
Answer: $5,000
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
Principal and interest are payable in full at maturity on October 31,
Year 2. What is the amount of interest payable that should be
reported by Universal Travel, Incorporated on December 31, Year 2?
Answer: $0
◉ Universal Travel, Incorporated borrowed $500,000 on November
1, Year 1, and signed a twelve-month note bearing interest at 6%.
