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Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that...

Bjork, Inc. borrowed $150,000 from 1st Star Bank on July 1, 2016. The loan stipulates that the annual interest rate is 8%, payable on the 15th of each month, beginning July 15, 2016. Assume Bjork makes all interest payments when they are due. How much will Bjork, Inc. report on its 2016 balance sheet for interest payable?

a. $0

b. $500

c. $6,000

d. $5,500

e. $12,000

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Answer #1

Answer:

Fiscal year starting from 1st July 2015 to 30th June 2016, refers to the fiscal year 2016.

So, no interest payments will be considered in 2016 balance sheet.

Ans: a. $ 0

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