Use Ordinary Interest

question 83

Short Answer

Use ordinary interest:
$$\begin{array} { | l | l | l | l | l | l | l | } \hline & \text { Interest } & \text { Date } & \text { Date } & & \text { Simple } & \text { Amount Paid } \\\text { Principal } & \text { Rate } & \text { Borrowed } & \text { Repaid } & \text { Time } & \text { Interest } & \text { Back } \\\hline \$ 8,000 & 12 \% & \text { May 5 } & \text { Aug 10 } & \text { A } & \text { B } & \text { C } \\\hline\end{array}$$

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Definitions:

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of an entity.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Current Ratio

A financial metric that evaluates a firm's capacity to meet its short-term liabilities using its existing assets.

Industry Average

The mean performance metric, such as revenue growth or return on equity, of the companies in a particular industry or sector.