Marsh Corporation borrowed $90,000 by issuing a 12%,six-month note payable,all due at the maturity date.After one month,the company's total liability for this loan amounts to
A)$91,800.
B)$90,900.
C)$90,450.
D)$90,000.

Question

Quizplus · Accepted Answer

The interest for one month can be calculated as follows:

Interest = Principal x Rate x Time 
= $90,000 x 0.12 x (1/12) 
= $900

Therefore, after one month, the total liability for the loan is:

Total Liability = Principal + Interest 
= $90,000 + $900 
= $90,900

Hence, the correct answer is B.

Marsh Corporation Borrowed $90,000 by Issuing a 12%,six-Month Note Payable,all