On November 1, 2018, New Morning Bakery signed a $195,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2019. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2018. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2019? (Do not round your intermediate calculations.)

Question

Business

Whitney Schultz

30 April, 19:10

On November 1, 2018, New Morning Bakery signed a $195,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2019. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2018. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2019? (Do not round your intermediate calculations.)

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Answers (1)

Know the Answer?

Claire Hancock · Answer 1

total cash pay is $200850

Explanation:

given data

Bakery signed P = $195000

rate R = 6 %

time T = 6 month

to find out

cash amount will be needed to pay back with interest

solution

we find first interest for 6 month that is 6/12 year

so interest = P*R*T

interest = 195000*0.06*6/12

interest = $5850

so total amount pay = Principal + Interest

total amount pay = 195000 + 5850

total cash pay = $200850