Warner Company borrowed $25,000 cash on November 1,20A,and signed a six-month,12% interest-bearing note payable with interest payable at maturity.What is the amount of accrued interest payable that should be shown on the 20A statement of financial position?

Question

Quizplus · Accepted Answer

The interest for two months (November and December) needs to be accrued. The formula for interest is Principal x Rate x Time. Here, $25,000 x 12% x (2/12) = $500.

Warner Company Borrowed $25,000 Cash on November 1,20A,and Signed a Six-Month,12