Question

Universal Travel Inc. borrowed $506,000 on November 1, 2021, and signed a 12-month note bearing interest at 5%. Interest is payable in full at maturity on October 31, 2022. In connection with this note, Universal Travel Inc. should report interest payable at December 31, 2021, in the amount of: (Round your final answers to the nearest whole dollar.)

Answer 1

Answer:

$5,060

Explanation:

Borrowed caah $506,000

12-month note bearing interest at 5%.

Hence,

$506,000 x 6% x 2/12 = $5,060

Therefore in connection with the note, Universal Travel Inc. should report interest payable at December 31, 2021, in the amount $5,060