Question

Inez is the head accountant for a bank. She is booking entries to the general ledger so she can close the month and calculate her income statement and balance sheet. Based on the chart below, what is the total interest income that Inez 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

$232,000
$232,000

$85,000
$85,000

$165,000
$165,000

$67,000

Answer 1

To determine the total interest income that Inez must book, we need to focus on the relevant entries related to interest income.

From the chart provided, the relevant items are:

- Interest Paid on Savings Accounts: **$110,000** (Note: This is an expense, not income)
- Interest Paid on Certificate of Deposit Accounts: **$55,000** (Note: This is also an expense)
- Interest Received on Auto Loans: **$85,000** (This is income)

The items that contribute to interest income are only the interest received. So, Inez would only book the **$85,000** from the interest received on auto loans as interest income.

Therefore, the total interest income that Inez must book is **$85,000**.