Financial and Managerial Accounting: Information for Decisions
Financial and Managerial Accounting: Information for Decisions
6th Edition
ISBN: 9780078025761
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 9, Problem 1MCQ
To determine

Interest Expenses:

Interest expenses represent that amount which is payable on any type of debt borrowed by a person at a fixed rate payable in fixed intervals.

To identify: The correct option.

Expert Solution & Answer
Check Mark

Answer to Problem 1MCQ

‘Option b’ is correct.

Explanation of Solution

Interest Expense
IntrestExpenses=Principal×InterestRate× OutstandingDaysonDecember31 360Days =$6,000×5%× 30 360days =$6,000×0.05× 1 12 =$25

Thus, interest expense is $25.

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Chapter 9 Solutions

Financial and Managerial Accounting: Information for Decisions

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