Collier borrowed $175,000 on October 1 and is required to pay $180,000 on March 1.What amount is the note payable recorded at on October 1 and how much interest is recognized from October 1 to December 31?

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The note payable is recorded at the principal amount of $175,000 on October 1. The interest recognized from October 1 to December 31 is $3,000, calculated as the difference between the repayment amount ($180,000) and the principal ($175,000) prorated for the period (3 months out of 5 months total).

Collier Borrowed $175,000 on October 1 and Is Required to Pay