Homework SourseAccrued Interest Payable Compute the interest accrued on eac
Accrued Interest Payable
Compute the interest accrued on each of the following notes payable owed by Northland, Inc., on December 31:
Use 360 days for calculations and round the nearest dollar.
| Lender | Date of Note | Principal | Interest Rate | (%) | Term |
|---|---|---|---|---|---|
| Maple | November 21 | $21,000 | 10% | 120 days | |
| Wyman | December 13 | 17,000 | 9% | 60 days | |
| Nahn | December 19 | 19,000 | 12% | 90 days |
Solution
Accrued Interest as on December, 31 = Principal * Interest Rate * (Number of Days till December 31 from the Date of Note)/ 360 Days in a Year
Hence,
Hence the correct answer is:
| Lender | Date of Note | Principal | Interest Rate | (%) | Term | As on December 31, Number of Days | Interest |
| Maple | 21-Nov | 21,000 | 10% | 120 days | 40 | 233 | |
| Wyman | 13-Dec | 17,000 | 9% | 60 days | 18 | 77 | |
| Nahn | 19-Dec | 19,000 | 12% | 90 days | 12 | 76 |
