Windsor, Inc. signs a $36000, 10%, 6-month note payable on September 1, 2021. How much interest...
Windsor, Inc. signs a $36000, 10%, 6-month note payable on September 1, 2021. How much interest expense will Windsor report in its 2022 financial statements?
A) $0
B) $600
C) $1200
D) $1800
Homework Answers
In 2021, 4 months till Dec 31
Interest expense for 4 months = $36,000 *10% *4/12 = $1,200
In 2022, 2 more months will be left
Interest expense for 2 months = $36,000 *10% *2/12 = $600
Option 'B' is correct
Interest expense Windsor report in 2022 in Financial statements is $600
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