Question

On December 1, Victoria Company signed a 90-day, 8% note payable, with a face value of $16,200. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Answer 1

Answer: Interest expense=$108

Explanation:

Interest expense =Principal x Rate x Time ( Period)

Where

Principal = $16,200

Rate =, 8%

TIme ( Period ) =  From December 1st to 31`st = 30 days

Interest expense= P x R x T

= $16,200 X 0.08 X 30/360

=$108

The amount of interest expense accrued at December 31 on the note is $108