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

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