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klio [65]
3 years ago
13

On October 1, 2018, Hill Company borrows $20,000 from a local bank. The note has an interest rate of 6% and is due in one year.

How much interest expense will Hill Company report on its 2018 income statement?
Business
1 answer:
Alex Ar [27]3 years ago
8 0

Answer:

Amount of interest = $ 300

Explanation:

Given:

Total number of month = 3 months (Oct, Nov and Dec)

Amount borrow = $20,000

Interest rate = 6%

Find:

Amount of interest

Computation:

Amount of interest = $20,000 x 6% x 3 months / 12 months

Amount of interest = $ 300

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