Universal Travel,Inc.borrowed $500,000 on November 1,2018,and signed a twelve-month note bearing interest at 6%.Principal and interest are payable in full at maturity on October 31,2019.In connection with this note,Universal Travel,Inc.should report interest payable at December 31,2018,in the amount of:

Question

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The interest for two months (November and December) is calculated as $500,000 * 6% * (2/12) = $5,000.