A Company Needs to Record 6 Months of Accrued Interest

question 120

Multiple Choice

A company needs to record 6 months of accrued interest on a 4-year, 12%, $12,000 promissory note payable. How much interest expense should be accrued?

• A)$2,160
• B)$1,440
• C)$1,080
• D)$720

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Definitions:

Stable

Refers to an object, substance, or system that remains unchanged or resists change in conditions or under pressure.

Electrically Charged

A state of having an imbalance in the number of protons and electrons, resulting in a positive or negative electrical charge.

Electrically Neutral

A state in which an object or system has an equal number of positive and negative charges, resulting in no overall net charge.

Electrons

Negatively charged subatomic particles orbiting the nucleus of an atom, involved in chemical reactions and electrical conductivity.