Kieso Company borrowed $720,000 on a 120-day note at 10 percent interest. The money was borrowed for 45 days in 2014 and 75 days in 2015; the note and interest were to be paid upon maturity in 2015. (Assume 360 days in a year.) How much interest expense, if any, would be reported in 2014 and in 2015?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 36P
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Kieso Company borrowed $720,000 on a 120 day note at 10 percent interest. Give correct calculation of this general accounting

Kieso Company borrowed $720,000 on a
120-day note at 10 percent interest. The
money was borrowed for 45 days in 2014
and 75 days in 2015; the note and interest
were to be paid upon maturity in 2015.
(Assume 360 days in a year.) How much
interest expense, if any, would be reported
in 2014 and in 2015?
Transcribed Image Text:Kieso Company borrowed $720,000 on a 120-day note at 10 percent interest. The money was borrowed for 45 days in 2014 and 75 days in 2015; the note and interest were to be paid upon maturity in 2015. (Assume 360 days in a year.) How much interest expense, if any, would be reported in 2014 and in 2015?
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