On November 1, 2021, Tim's Toys borrows $30,000,000 at 9% to finance the holiday sales season. The note is for a six-month term

Question

2 years ago

6

and both principal and interest are payable at maturity. What is the balance of interest expense for the loan as of December 31, 2022?

1 answer:

nikdorinn [45] · Answer 1 · 2023-04-28T09:11:25+03:00

The balance of interest expense for the loan as of December 31, 2022 is: $450,000.

<h3>Interest expenses </h3>

Loan was outstanding months= November 2022 to December 2022

Using this formula

Interest expenses=Amount borrowed×Interest rate×2/12

Let plug in the formula

Interest expenses= $30,000,000×9%×2/12

Interest expenses=$450,000

Therefore the interest expenses is $450,000.

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