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Seattle Company issued a $90,000 face value discount note payable to the First Federal Bank on September 1,2016.The note carried a one-year term and a 4% discount rate.
-The amount of interest expense appearing on the 2016 income statement would be:
A)$1,200.
B)$3,600.
C)$2,400.
D)$7,200.

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Seattle Company issued a $90,000 face value discount note payable to the First Federal Bank on September 1,2016.The note carried a one-year term and a 4% discount rate.
-The amount of interest expense appearing on the 2016 income statement would be:
A)$1,200.
B)$3,600.
C)$2,400.
D)$7,200.

Quizplus · Accepted Answer

The amount of interest expense appearing on the 2016 income statement would be $3,600 ($90,000 x 4%).

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