Can anyone please explain the calculation Use the following

Can anyone please explain the calculation?

Use the following information to answer the question: Gus Inc. borrowed $12,000 by issuing a 1296, 120 day note payable on November 1, 2008. The amount of the December 31, 2008 adjusting journal entry would be? Selected Answer: [None Given] Answers: $1,440 $240 $480 $720 None of the above

Solution

B. $240

The amount of the December 31, 2008 adjusting journal entry would be:

= $12,000 * 0.12 * 60/360

= $240