Masters Company borrowed on a one-year,10%,$150,000 note on May 1,with interest and principal to be paid at maturity.How much interest payable will be reported on Masters' balance sheet as of November 30 of the same year?

Question

Quizplus · Accepted Answer

The interest payable for a six-month period (from May 1 to November 30) can be calculated as follows: 
Interest = Principal x Rate x Time 
= $150,000 x 10% x 6/12 
= $7,500 
Therefore, option B is the correct answer.

Masters Company Borrowed on a One-Year,10%,$150,000 Note on May 1,with