ABC Company Signed a One-Year $48,000 Note Payable at 8

question 119

Multiple Choice

ABC Company signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If ABC only adjusts their accounts once a year at year-end, how much interest expense was accrued on December 31, 2014?

• A)$1,280
• B)$3,840
• C)$2,560
• D)$3,200

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Definitions:

Vendors

Individuals or companies that sell goods or services to another entity, usually as part of the supply chain in a specific commercial transaction.

Service Sector

The segment of the economy that provides services rather than producing goods, including sectors like healthcare, education, and finance.

Entrepreneurship

The activity of setting up a business or businesses, taking on financial risks in the hope of profit.

Marketplace

A platform or area where goods and services are exchanged or sold.