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Elemental Company borrows money under various loan agreement involving notes discounted and notes requiring interest payments at maturity. During the current year ended December 31, Elemental paid interest totaling P5,000,000.
The balance sheets included the following: December 31 January 1Interest payable 2,500,000 2,000,000Prepaid interest 1,500,000 500,000 Problem 1: How much interest expense should Elemental report for the current year?
A. 4,500,000
B. 3,500,000
C. 6,500,000
D. 5,500,000
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