On November 1,2012,EZ Products borrowed $48,000 on a 5%,10-year note with annual installment payments of $4,800 plus interest due on November 1 of each succeeding year.
-How much interest expense should be accrued at December 31,2012 for the period of November 1 through year-end?
A) $1,200
B) $2,400
C) $400
D) $200

Question

Quizplus · Accepted Answer

C) Calculations: $48,000 × 5% × 2/12 = $400

On November 1,2012,EZ Products Borrowed $48,000 on a 5%,10-Year Note