Final answer:
The accrued interest payable by Mura Company on the $350,000 note payable on December 31 is $6,300. By February 5, which is the maturity date of the note, the total interest recognized is $10,500.
Step-by-step explanation:
To compute the accrued interest payable on December 31 from the $350,000 note payable taken by Mura Company with a 90-day duration and a 12% annual interest rate, we use the formula:
Interest = Principal × Rate × Time
Since Mura Company took out the note on November 7, by December 31, 54 days will have elapsed (assuming November has 30 days and December has 31 days).
Interest = $350,000 × 12% × (54/360)Interest = $350,000 × 0.12 × 0.15
Interest = $6300
Thus, the interest accrued on December 31 is $6,300.
Next, to find the interest recognized on February 5 which is the maturity date (90 days from November 7), we compute the interest for the full 90 days.
Interest = $350,000 × 12% × (90/360)
Interest = $350,000 × 0.12 × 0.25
Interest = $10500
Hence, the total interest recognized on the note's maturity date, February 5, is $10,500.