How Are Interest Expense and Interest Paid Reported

How are interest expense and interest paid reported?

A) Interest expense is reported as an operating item on the income statement and interest paid is reported as an investing activity on the statement of cash flows.
B) Interest paid is reported as an operating activity on the statement of cash flows and interest expense is reported as a nonoperating expense on the income statement.
C) Interest expense is reported as an operating expense on the income statement and interest paid is reported as a financing activity on the statement of cash flows.
D) Interest paid is reported as a financing activity on the statement of cash flows and interest expense is reported as an operating item on the income statement.

Correct Answer:

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