Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. How much should be in the firm's interest payable account at December 31, 2013?

Name: Martin & Associates borrowed $5,000 on April 1, 2013 at 8% interest with both principal and interest due on March 31, 2014. How much should be in the firm's interest payable account at December 31, 2013?
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Question

Quizplus · Accepted Answer

Interest for 9 months (April to December) is calculated as $5,000 * 8% * (9/12) = $300.

Martin & Associates Borrowed $5,000 on April 1, 2013 at 8