Use the following information for questions:
Pluto Co.borrowed $25,000 on September 1, 2010 on a nine-month, 8% note.Interest and principal are due at maturity.
-The total liability reflected on the December 31, 2010 balance sheet concerning this note would be closest to:
A)$25,000
B)$25,667
C)$26,500
D)$27,000

Question

Quizplus · Accepted Answer

The interest on the note for four months (September-December) is $25,000 x 8% x 4/12 = $667. Therefore, the total liability reflected on the December 31, 2010 balance sheet is $25,000 + $667 = $25,667.

Use the Following Information for Questions