Final answer:
The interest expense recorded in the year 2016 for the $20,000 note payable at 8% interest is approximately $267, which accounts for two months of interest in that year.
Step-by-step explanation:
The student is asking what is the amount of interest expense recorded in the year 2016 for a $20,000, 3-month, 8% note payable that was issued on November 1, 2015. To calculate the interest for the year 2016, you need to consider only the interest that would accrue in that year, which means only for two months of the note's duration (January and February 2016).
The interest for one month would be calculated as $20,000 × 8% × (1/12), which is approximately $133.33. Since two months are in question for the year 2016, the interest expense recorded would be $133.33 × 2, which equals approximately $266.67. Therefore, the correct answer is $267, when rounded to the nearest dollar.