Mariner,Inc.bought a lobster boat on November 1,2011 in exchange for a 2-month,6%,$80,000 note.The note plus interest will be repaid on January 1,2012,the maturity date.How much interest payable should the company report on its balance sheet at November 30,2011?

Question

Quizplus · Accepted Answer

The interest payable accrued on November 30, 2011, would only cover one month of the note's two-month term. Therefore, the interest payable would be calculated as follows: $80,000 x 6% x 1/12 month = $400.  The correct answer is option C.