What is the adjustment to Interest Expense on December 31 if Elegant Company (debtor) owes Pristine Company (the holder of the note) a $22,000, 60-day, 10% note on December 12th? (Use a 360-day year. Do not round any intermediate calculations. Round your final answers to the nearest dollar.)
A) $2,200
B) $116
C) $367
D) $61

Question

Quizplus · Accepted Answer

The interest expense for the period from December 12 to December 31 (19 days) is calculated as follows: Interest = Principal x Rate x Time = $22,000 x 10% x (19/360) = $116.

What Is the Adjustment to Interest Expense on December 31