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16 September, 06:52

On December 1, Victoria Company signed a 90-day. 8% note payable, with a face value of $16, 200. What amount of interest expense is accrued at December 31 on the note?

a. $0

b. $1, 296

c. $216

d. $108

e. $324

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Answers (1)
  1. 16 September, 07:07
    0
    Option (d) is correct.

    Explanation:

    Given that,

    On December 1,

    Victoria Company signed a 90-day. 8% note payable, with a face value of $16, 200

    Interest expense on December 31 is accrued for 30 days (Dec 1 - Dec 31)

    Interest expense:

    = Amount of note payable * Interest rate * Time period

    = $16,200 * 8% * (30 : 360)

    = $108

    Therefore, amount of interest expense is accrued at December 31 on the note is $108.
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