Bella borrowed on a one-year, 6%, $100,000 note on May 1, 2017 with interest and principal...

Question

Question

business accounting

Answer 1

Answer #1

Values Given:

Rate of interest = 6%

Borrowed Amount = $100,000

Date of borrowing = May 01 , 2017

Year ending = December 31, 2017

Period of interest = May 01 - Dec 31 = 8 months

Calculation of interest amount to be shown in income statement of innovate company for the year ending Dec 31, 2017 :

Interest Amount = Borrowed Amount * Rate of interest * period of interest

= $100,000 * 6% * 8/12

= $ 6000 * 8/12

= $4,000

Therefore the Correct option = C.$4,000

Answer 2

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