Question

Analyzing and Computing Accrued Interest on Notes Compute any interest accrued for each of the following notes payable owed by Penman, Inc., as of December 31, 2012 (assume a 365-day year). Round your answers to two decimal places. Lender Issuance Date Principal Coupon Rate (%) Term Accrued Interest Nissim 11/21/2012 $18,000 10% 120 days Answer 0 Klein 12/13/2012 14,000 9 90 days Answer 0 Bildersee 12/19/2012 16,000 12 60 days

Answer 1

Step-by-step explanation:

The formula to compute the accrued interest is shown below:

= Principal × rate of interest × number of months ÷ (total number of months in a year)

For Nissim

The computation of accrued interest is shown below:

= Principal × rate of interest × number of days ÷ (total number of months in a year)

= $18,000 × 10% × ( 41 days ÷ 365 days)

= $202.19

The 10 days of November and 31 days of December equals to 41 days

For Klein

The computation of accrued interest is shown below:

= Principal × rate of interest × number of days ÷ (total number of months in a year)

= $14,000 × 9% × ( 18 days ÷ 365 days)

= $62.13

The 18 days of December month

For Bildersee

The computation of accrued interest is shown below:

= Principal × rate of interest × number of days ÷ (total number of months in a year)

= $16,000 × 12% × ( 12 days ÷ 365 days)

= $63.12

The 12 days of December month