Question

Jupiter Company signed a onedashyear ​$36,000 note payable at​ 8% interest on March​ 1, 2019. How much interest expense must be accrued on May​ 31, 2019?​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest whole​ number.)

Answer 1

The answer is: $720

Step-by-step explanation:

We can use the following formula to calculate Jupiter Company's interest expenses:

• interest expenses = principal x (annual interest / 12) x number of months

interest expenses = $36,000 x (8%/12) x 3 months (March, April and May)

interest expenses = $36,000 x 0.0067 x 3 = $720