Over the life of a note payable,the amount of interest expense allocated to each period is calculated by
A)Multiplying the interest rate at issuance of the note by the beginning-of-period balance of the note
B)Dividing the interest rate at issuance of the note by the beginning-of-period balance of the note
C)Multiplying the interest rate at issuance of the note by the end-of-period balance of the note
D)Multiplying the market interest rate at issuance of the note by the beginning-of-period balance of the note
E)Multiplying either the interest rate or the market interest rate at issuance of the note by the beginning-of-period balance of the note

Question

Quizplus · Accepted Answer

The amount of interest expense allocated to each period is calculated by multiplying the interest rate at issuance of the note by the beginning-of-period balance of the note. This is because interest expense is calculated based on the outstanding balance of the note, and the interest rate is applied to this balance.

Over the Life of a Note Payable,the Amount of Interest