28 Jun, 2021 03:26 PM

Interest question accounting?

Four Oaks Golf Inc. was organized on July 1, 2012. Quarterly financial statements are prepared. The trial balance and adjusted trial balance on September 30 are shown here. FOUR OAKS GOLF INC. Trial Balance September 30, 2012 Notes Payable $5,000 Interest Expense $50 Interest Payable $50 If the note bears interest at 12%, how many months has it been outstanding? thank you

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28 Jun, 2021 03:26 PM

50 / 5,000 = 1%

Since the interest rate is 12% per year and 1% is 1/12 of 12%, the note has been outstanding for one month.