Frankenstein Enterprises Received Two Notes from Customers for Sales That

question 157

Multiple Choice

Frankenstein Enterprises received two notes from customers for sales that Frankenstein made in 2013. The notes included: Note A: Dated 5/31/2013, principal of $120,000 and interest due 3/31/2014.
Note B: Dated 7/1/2013, principal of $200,000 and interest at 8% annually, due on 4/1/2014.
Frankenstein had accrued interest receivable from these notes of $14,400 in its 12/31/2013 balance sheet. What is the annual interest rate on Note A?

• A)9.14%.
• B)8%.
• C)9.74%.
• D)9.44%.