Question

On december 1, victoria company signed a 90-day, 4% note payable, with a face value of $7,800. what amount of interest expense is accrued at december 31 on the note?

Answer 1

Sorry dont no.........

Answer 2

Answer:

$26

Explanation:

Note payable is a financial instrument. In this situation note payable due date is after 3 months. So, after one month we will record interest on note payable as follows:

7800*4%*(3/12) = 78

For 1 month = 78/3  =  26

The note payable was sold on dec-1, and we need to calculate its interest on dec-31, which is one month. So, we will divide total interest 78 by 3. This will give us one months interest.