[The following information applies to the questions displayed below.]

Madison Company issued an interest-bearing note payable with a face value of $24,000 and a stated interest rate of 8% to Metropolitan Bank on August 1, Year 1. The note carried a one-year term.

-Based on this information alone,what is the amount of total liabilities appearing on Madison's balance sheet as of December 31,Year 1?
A)$24,720
B)$24,800
C)$25,920
D)$24,000

Question

[The following information applies to the questions displayed below.]

Madison Company issued an interest-bearing note payable with a face value of $24,000 and a stated interest rate of 8% to Metropolitan Bank on August 1, Year 1. The note carried a one-year term.

-Based on this information alone,what is the amount of total liabilities appearing on Madison's balance sheet as of December 31,Year 1?
A)$24,720
B)$24,800
C)$25,920
D)$24,000

Quizplus · Accepted Answer

Interest payable = $24,000 × 8% × (5 ÷ 12)= $800
Total liabilities = Note payable of $24,000 + Interest payable of $800 = $24,800

[The Following Information Applies to the Questions Displayed Below