Question

On December 1, Victoria Company signed a 90-day, 8% note payable, with a face value of $6,600. What amount of interest expense is accrued at December 31 on the note?a. $0b. $1, 296 c. $216 d. $108 e. $324

Answer 1

Answer:

$44

Explanation:

The computation of the accrued interest expense is shown below:

= Face value or Principal × rate of interest × number of days ÷ (total number of days in a year)  

= $6,600 × 8% × (30 days ÷ 360 days)

= $44

We assume there are 360 days in a year

And, the 30 days is calculated from December 1 to December 31

This is the answer and same is not mentioned in the given options.