On July 1,20A,Bill Company signed a two-year $8,000 note payable with 9 percent interest.At due date,July 1,20C,the principal and interest will be paid in full.Interest expense should be reported on the income statement for the year ended December 31,20A,in the amount of which of the following?

Question

Quizplus · Accepted Answer

Interest expense for the year ended December 31, 20A, is calculated for 6 months (from July 1 to December 31) on the $8,000 note at 9% annual interest. The calculation is: $8,000 * 9% * (6/12) = $360.

On July 1,20A,Bill Company Signed a Two-Year $8,000 Note Payable