Question

Question # 3
Multiple Choice
Marcus is the head accountant for a bank. He is booking entries to the general ledger so he can close the month and calculate the income statement and balance sheet. Based on the chart below, what is the total interest expense that Marcus must book?

Interest Paid on Savings Accounts $110,000
Interest Paid on Certificate of Deposit Accounts $55,000
Fees Paid by Customers for Wire Transfers $7,000
ATM Fees Paid by Customers $60,000
Interest Received on Auto Loans $85,000
Salaries $100,000
Responses

$67,000
$67,000

$85,000
$85,000

$232,000
$232,000

$165,000

Answer 1

To calculate the total interest expense that Marcus must book, we only include the relevant interest expenses. According to the provided data, the relevant amounts are:

- Interest Paid on Savings Accounts: $110,000
- Interest Paid on Certificate of Deposit Accounts: $55,000

The other entries (fees and interest received on loans) are not relevant to the interest expense.

So, the total interest expense is:

\[
110,000 + 55,000 = 165,000
\]

Therefore, the correct response is:

**$165,000**.