On December 1,2018,Old World Deli signed a $300,000,5%,six-month note payable with the amount borrowed plus accrued interest due six months later on June 1,2019.Old World Deli records the appropriate adjusting entry for the note on December 31,2018.What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1,2019?

Question

Quizplus · Accepted Answer

The total amount of cash needed to pay back the note payable plus any accrued interest on June 1, 2019, is calculated by adding the principal amount of $300,000 to the interest that accrues over six months. The interest is calculated as follows: $300,000 * 5% * (6/12) = $7,500. Therefore, the total amount due is $300,000 + $7,500 = $307,500.

On December 1,2018,Old World Deli Signed a $300,000,5%,six-Month Note Payable