Jane's Donut Co. borrowed $200,000 on January 1, 2021, and signed a two-year note bearing interest at 12%. Interest is payable i

Question

2 years ago

5

Jane's Donut Co. borrowed $200,000 on January 1, 2021, and signed a two-year note bearing interest at 12%. Interest is payable i

n full at maturity on January 1, 2023. In connection with this note, Jane's should report interest expense at December 31, 2021, in the amount of: Group of answer choices $50,880. $0. $24,000. $48,000.

Business

1 answer:

Katen [24] · Answer 1 · 2022-05-16T20:26:15+03:00

Answer:

$24,000

Explanation:

The computation of the interest expense is shown below:

= Borrowed amount × rate of interest

= $200,000 × 12%

= $24,000

We simply multiplied the borrowed amount with the rate of interest so that the interest expense could come

hence, the third option is correct