On October 1,2018,Allen Emig borrowed $306,000 from the West Coast Bank on a 6-month,6% note.Assuming no interest has been recorded yet,what is the amount of accrued interest as of December 31,2018?
A)$9,180
B)$4,590
C)$18,360
D)$13,770

Question

Quizplus · Accepted Answer

Interest expense is calculated for October through December as follows:
Interest = Principal (P)× Interest Rate (R)× Time (T)
= $306,000 × 0.06 × 3 / 12 = $4,590

On October 1,2018,Allen Emig Borrowed $306,000 from the West Coast