Answer:
$3,169,880
Explanation:
Calculation for How much is 2020 interest Expenses
First step is to calculate December 31, 2019 note payable liability
Using this formula
December 31, 2019 note payable liability = Initial debt + 2019 interest expense - First annual payment
Let plug in the formula
December 31, 2019 note payable liability = $37,908,000+ ($37,908,000 ×10%) - ($10,000,000)
December 31, 2019 note payable liability=$37,908,000+$3,790,800-$10,000,000
December 31, 2019 note payable liability=$31,698,800
Now let calculate 2020 interest expense
2020 interest expense = January 1, 2020 book value $31,698,800 ×10%
2020 interest expense =$3,169,880
Therefore 2020 interest Expenses will be $3,169,880
