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8 April, 13:54

Mission Corp. borrowed $50,000 cash on April 1, 2016, and signed a one-year 12%, interest-bearing note payable. The interest and principal are both due on March 31, 2017. The amount of interest expense for the year ended December 31, 2016 is: Group of answer choices $6,000. $4,500. $1,500. $4,000.

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  1. 8 April, 15:01
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    Answer:$4,500---B, ie the 2nd option

    Explanation:

    From April to December we have 9 months

    Interest Expense is given as Loan x Interest Rate x duration

    Interest Expense = 50000 x 12% x 9/12 =

    50,000x 0.12x9/12 = $4,500
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