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5 December, 13:36

Maggie Sharrer Company borrows $88,500 on September 1, 2022, from Sandwich State Bank by signing an $88,500, 12%, one-year note. What is the accrued interest at December 31, 2022?

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  1. 5 December, 15:20
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    The accrued interest at December 31, 2022 amounts to $3,540

    Explanation:

    Accrued Interest = Amount borrowed * rate * Number of months / 12

    where

    amount borrowed is $88,500

    rate is 12%

    = $88,500 * 12% * 4/12

    = $3,540

    The accrued interest for one year note is $3,540

    Note: Number of months from September to December will be 4 months that is September, October, November and December.
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