On January 1, the Hudson Company borrowed $150,000 to purchase machinery and agreed to pay 4% interest for six years on an installment note. Each note payment is $28,614 and is due on the last day of the year. How much interest will Hudson report for the first year of the loan? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.) O A. $6,000 OB. $28,614 C. $22,614 OD. $1,145

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 1PA: On January 1, 2018, King Inc. borrowed $150,000 and signed a 5-year, note payable with a 10%...
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On January 1, the Hudson Company borrowed $150,000 to purchase machinery and agreed to pay 4% interest for six years on an installment note. Each note payment is $28,614 and is due on the last day of the
year. How much interest will Hudson report for the first year of the loan? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.)
O A. $6,000
OB. $28,614
C. $22,614
OD. $1,145
Transcribed Image Text:On January 1, the Hudson Company borrowed $150,000 to purchase machinery and agreed to pay 4% interest for six years on an installment note. Each note payment is $28,614 and is due on the last day of the year. How much interest will Hudson report for the first year of the loan? (Do not round intermediate calculations. Only round your final answer to the nearest dollar.) O A. $6,000 OB. $28,614 C. $22,614 OD. $1,145
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