On 1 November, Year 1, Noble Co. borrowed $80,000 from South Bank and signed a 12%, six-month note payable, all due at maturity. The interest on this loan is stated separately.

-At 31 December, Year 1, Noble Co.'s overall liability for this loan amounts to:

Question

On 1 November,  Year 1, Noble Co. borrowed $80,000 from South Bank and signed a 12%, six-month note payable, all due at maturity. The interest on this loan is stated separately.

-At 31 December, Year 1, Noble Co.'s overall liability for this loan amounts to:

Quizplus · Accepted Answer

The interest for six months is $80,000 x 12% x 6/12 = $4,800. The total liability at 31 December, Year 1 is $80,000 + $4,800 = $84,800.