IXOS Ltd. accepted an eighteen-month, $15,000, 8% note from ECM Corporation on June 1, 2020. The amount of interest to be accrued on December 31, 2020, is:

Question

Quizplus · Accepted Answer

To calculate the interest to be accrued on December 31, 2020, we need to find the time period from June 1, 2020, to December 31, 2020, which is 7 months.

Using the formula:

Interest = (Principal x Rate x Time)
           = ($15,000 x 0.08 x 7/12)
           = $700

Therefore, the answer is choice C, $700.

IXOS Ltd Accepted an Eighteen-Month, $15,000, 8% Note from ECM Corporation