On December 1 Victoria Company signed a 90day 6 note payable

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of S2000. what amount of interest expenses accrued at December 31 on the note? (Use 360 days a year) Multiple Choice M3? E R Ere4 s D B N M

Solution

Option C ($60) is the answer

Total value of bond at the end = 12,000 + 6% of 12000 = 12720

Therefore total interest = 12720-12000 = 720

Interest accrued for December = 720 x (1 month /12 months) =$60

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