A company borrowed $100,000 on a one-year, 10% note on September 1, with interest and principal to be paid at maturity. How much interest payable will be reported on the balance sheet at November 30?

Question

Quizplus · Accepted Answer

The interest payable for 3 months (September 1 to November 30) on a $100,000 loan at a 10% annual interest rate is calculated as follows: $100,000 * 10% * (3/12) = $2,500.

A Company Borrowed $100,000 on a One-Year, 10% Note on September