Jupiter, Inc. signed a oneminusyear $ 42 comma 000 note payable at 8% interest on April 1, 2016. If Jupiter, Inc. only adjusts its accounts once a year at yearminusend, how much interest expense was accrued on December 31, 2016? (Round any intermediate calculations to two decimal places, and your final answer to the nearest whole number.)

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andromache andromache · Answer 1 · 2019-09-27T10:40:19+02:00

Answer:

The accrued interest is $2,520

Explanation:

The computation of accrued interest is shown below:

= (Notes payable amount) × (interest rate) × (number of months ÷ total number of months in a year)

= ($42,000) × (8%) × (9 months ÷ 12 months)

= $2,520

The 9 months is computed from April 1, 2016, to December 31, 2016 . Moreover, all the item values are to be considered in the computation part.