on november 7, mura company borrows $270,000 cash by signing a 90 - day, 10%, $270,000 note payable…
on november 7, mura company borrows $270,000 cash by signing a 90 - day, 10%, $270,000 note payable. complete this question by entering your answers in the tabs below. req 1 req 2 and 3 compute the accrued interest payable on december 31. note: use 360 days a year. do not round your intermediate calculations.
Answer
Explanation:
Step1: Calculate the number of days from November 7 to December 31
November has 30 days. From November 7 to November 30, there are $30 - 7=23$ days. December has 31 days. So the total number of days from November 7 to December 31 is $23 + 31=54$ days.
Step2: Use the simple - interest formula $I = P\times r\times t$
The principal amount $P=$270000$, the annual interest rate $r = 10%=0.1$, and the time $t=\frac{54}{360}$ (since we are using 360 days a year). $I=270000\times0.1\times\frac{54}{360}$ $I = 270000\times0.1\times0.15$ $I=$4050$
Answer:
| Note Payable | Principal | × Rate (%) | × Time | = Interest |
|---|---|---|---|---|
| Total through maturity | $270000$ | $10$ | $\frac{90}{360}$ | $6750$ |
| Year - end interest accrual | $270000$ | $10$ | $\frac{54}{360}$ | $4050$ |
| Interest recognized February 5 | $270000$ | $10$ | $\frac{90 - 54}{360}$ | $2700$ |