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:

Financial Institutions

Organizations that provide financial services, such as banks, insurance companies, and investment firms.

Social Customs

Traditional practices and norms that dictate behavior within specific communities or societies.

IASC

The International Accounting Standards Committee, a former organization responsible for the development of global accounting standards.

IASB

International Accounting Standards Board, the organization responsible for issuing and updating International Financial Reporting Standards (IFRS).