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21 February, 04:18

Jane's Donut Co. borrowed $200,000 on January 1, 2021, and signed a two-year note bearing interest at 12%. Interest is payable in full at maturity on January 1, 2023. In connection with this note, Jane's should report interest expense at December 31, 2021, in the amount of:

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  1. 21 February, 04:20
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    Jane's should report interest expense at December 31, 2021, in the amount of $ 24000

    Explanation:

    Interest will be calculated as follows:

    Interest from January 1, 2021 to December 31, 2021 = 200000 x 12 %

    = 200000 x 12/100

    = 200000 x 0.12

    = 24,000

    $24000 will be reported as interest expense at December 31, 2021
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