Final answer:
The interest expense accrued on the note at December 31 is $86, calculated by applying the formula for simple interest using a principal of $25,800, an annual interest rate of 4%, and a time period of 30 days out of a 360-day year.
Step-by-step explanation:
To calculate the interest expense accrued on the note at December 31, we use the formula for simple interest: Interest = Principal × Rate × Time. The principal amount is $25,800, the annual interest rate is 4%, and the time must be calculated in terms of years. Since the note is for 60 days and a year is considered to be 360 days for this calculation, the time in years is 60/360, or 1/6 of a year.
To find the accrued interest for one month (up to December 31), we only consider 30 days:
Interest = $25,800 × 0.04 × (30/360)
This simplifies to:
Interest = $25,800 × 0.04 × 1/12
After doing the math, we find the interest:
Interest = $86
Therefore, the amount of interest expense accrued at December 31 on the note is $86.
The amount of interest expense accrued at December 31 on the note can be calculated using the formula: Interest Expense = Principal Amount x Interest Rate x Time.
Given that the principal amount is $25,800, the interest rate is 4% (or 0.04), and the time is 30 days (since December 1 to December 31 is 30 days), we can calculate the interest expense as follows:
Interest Expense = $25,800 x 0.04 x (30/360) = $86.
Therefore, the amount of interest expense accrued at December 31 on the note is $86.