What is the amount of the interest expense Able will recognize on this note in 2010?
A) $18,000.
B) $31,500.
C) $36,000.
D) $54,000.

Name: What is the amount of the interest expense Able will recognize on this note in 2010? A) $18,000. B) $31,500. C) $36,000. D) $54,000.
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Able's effective interest rate is 9% [(120,000 - 90,000) / (2 × 90,000)]. Therefore, the amount of interest expense Able will recognize on this note in 2010 is $36,000 (9% × $400,000).

What Is the Amount of the Interest Expense Able Will