Norwood, Inc. signs a $11,000, 8.5%, six-month note dated November 1, 2018. The interest expense recorded for this note in 2018 will be ________. (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The interest expense for 2018 can be calculated as follows: Principal ($11,000) * Annual Interest Rate (8.5%) * Time (2 months / 12 months) = $11,000 * 0.085 * (2/12) = $155.83, which rounds to $156.