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Homework answers / question archive / On December 1, Martin Company signed a $5,000, 3-month, 6% note payable, with the principle plus interest due on March 1 of the following year
On December 1, Martin Company signed a $5,000, 3-month, 6% note payable, with the principle plus interest due on March 1 of the following year. What amount of interest expense is accrued at December 31 on the note.
Answer:
b . $ 25
Step-by-Step explanation
Total interest Exp. = Note payable * Int. rate * Due month
= $5,000 * 6% * 3/12
= $75
Accrued int. exp. as on Dec. 31 = $75 * 1/3
= $25
