If Taylor Corp. receives a $10,000, 120-day, 6% note on October 1, 2016, the amount of interest that should be accrued on December 31, 2016, the end of Taylor's accounting period, is $200.
$10,000 × .06 × 90/360 = $150; the remaining 30 days of interest will be recorded in the following year

Question

Quizplus · Accepted Answer

The correct interest calculation for the period from October 1 to December 31 (90 days) is $10,000 × 0.06 × 90/360 = $150, not $200.