Question

a company borrowed $70,000 on march 1 by issuing an 18-month, 12% note. both the note and the interest will be paid when the note matures. which statement is true at december 31?

Answer 1

At December 31, the company still owes the $70,000 principal balance of the loan, along with the accrued interest.

Step-by-step explanation:

At December 31, the statement that is true is that the company still owes the $70,000 principal balance of the loan, along with the accrued interest. Since the note has an 18-month term and it was borrowed on March 1, the note will mature on August 31 of the following year. Therefore, at December 31 of the current year, the note is still outstanding and the company has not made any payments towards the principal or interest.