Harrison Corporation borrowed $31,000 from F&M Bank on June 1 of the current year. The bank required 9% interest. Interest will be paid when the nine-month note becomes due. What is the interest expense for the subsequent year in which the note is due and paid? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The interest for the subsequent year is calculated for the remaining three months (January to March) of the note's term. The annual interest is $31,000 * 9% = $2,790. For three months, the interest is $2,790 * (3/12) = $465.

Harrison Corporation Borrowed $31,000 from F&M Bank on June 1