RAS Corporation issued a one-year, 12%, $200,000 note on August 31, 2010. Interest expense for the year ended December 31, 2010 was

Name: RAS Corporation issued a one-year, 12%, $200,000 note on August 31, 2010. Interest expense for the year ended December 31, 2010 was
Brand: Quizplus
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Question

Quizplus · Accepted Answer

There are only 4 months left between August 31 and December 31, 2010, so the interest expense for that period would be:

$200,000 x 12% x (4/12) = $8,000.

Therefore, the correct answer is C.

RAS Corporation Issued a One-Year, 12%, $200,000 Note on August