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Howdy Company gave a one-year note to ABC Corporation on April 1, 2013, in exchange for a building. The face value of the note was $100,000. The interest rate was 10% and interest was paid on September 30 and March 31 (which is also the due date). What should Howdy record for interest expense in the appropriate entry at March 31, 2014, assuming the earlier adjusting entries have been recorded correctly? a $0 b $2,500 C $5,000 d $10,000

Howdy Company gave a one-year note to ABC Corporation on April 1, 2013, in exchange for a building. The face value of the note was $100,000. The interest rate was 10% and interest was paid on September 30 and March 31 (which is also the due date). What should Howdy record for interest expense in the appropriate entry at March 31, 2014, assuming the earlier adjusting entries have been recorded correctly? a $0 b $2,500 C $5,000 d $10,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Howdy Company gave a one-year note to ABC Corporation on April 1, 2013, in exchange for a building. The face value of the note was $100,000. The interest rate was 10% and interest was paid on September 30 and March 31 (which is also the due date). What should Howdy record for interest expense in the appropriate entry at March 31, 2014, assuming the earlier adjusting entries have been recorded correctly? a $0 b $2,500 C $5,000 d $10,000
Transcribed Image Text:Howdy Company gave a one-year note to ABC Corporation on April 1, 2013, in exchange for a building. The face value of the note was $100,000. The interest rate was 10% and interest was paid on September 30 and March 31 (which is also the due date). What should Howdy record for interest expense in the appropriate entry at March 31, 2014, assuming the earlier adjusting entries have been recorded correctly? a $0 b $2,500 C $5,000 d $10,000
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