ABC Company signed a oneyear 48000 note payable at 8 interes

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? $1,280 O $2,560 $3,200 $3,840

Solution

Answer b. $2,560 Interest Accrued on Dec 31, 2014 = $48,000 X 8% X 8/12 Interest Accrued on Dec 31, 2014 = $2,560