On May 1, Gladis Borrowed $10,000 on a Line of Credit

question 84

Multiple Choice

On May 1, Gladis borrowed $10,000 on a line of credit with an annual rate of 7.75%. On August 15, Gladis repaid half of the loan. From August 15 to December 31, the interest rate decreased to an annual rate of 7.50%. Determine the total simple interest charged from May 1 to December 31, when Gladis repaid all obligations.

• A) $358.67
• B) $366.85
• C) $371.91
• D) $383.42
• E) $397.86

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Definitions:

Unearned Revenue

Money received by a company for services or products which have not yet been delivered or performed.

Advance Subscription Sales

Revenue received from customers for subscriptions that are paid for before the subscription period begins.

Quarterly Journals

Publications that release issues on a quarterly basis, often academic or professional in nature, covering specific field subjects.

Journalized

Refers to the process of recording financial transactions in the chronological order of their occurrence in a company's journal, which is a primary accounting record.