Question

On September 1, 2021, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

Answer 1

The interest payable at the time period indicated will be $3000.

How to calculate the interest?

From the information given, the interest payable will be:

= Note value × Interest time × Time period

= $100000 × 9% × 4/12

= $100000 × 0.09 × 1/3

= $3000

In conclusion, the interest payable at the time period indicated will be $3000.

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