Universal Travel,Inc.borrowed $500,000 on November 1,2012,and signed a twelve-month note bearing interest at 6%.Principal and interest are payable in full at maturity on October 31,2013.In connection with this note,Universal Travel,Inc.should record interest expense in 2013 in the amount of:

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Interest expense for 2013 is calculated for the period from January 1, 2013, to October 31, 2013, which is 10 months. The annual interest is $30,000 (6% of $500,000), so for 10 months, it is $25,000.