Question

Jane's Donut Co. borrowed $198,000 on January 1, 2021, and signed a two-year note bearing interest at 11%. Interest is payable in full at maturity on January 1, 2023. In connection with this note, Jane's should report interest expense at December 31, 2021, in the amount of: Multiple Choice

Answer 1

$21,780

Step-by-step explanation:

Calculation to determine what Jane's should report interest expense at December 31, 2021, in the amount of:

Interest expense at December 31, 2021=$198,000 x 11% x 12/12

Interest expense at December 31, 2021= $21,780

Therefore Jane's should report interest expense at December 31, 2021, in the amount of: $21,780