Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at the maturity date, October 31, 2022. In connection with this note, Universal Travel, Inc. should report interest payable (computed on a monthly basis) at December 31, 2021, in the amount of: a. $8,000. b. $30,000. c. $5,000. d. $25,000.

Principles of Accounting Volume 1
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Author:OpenStax
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Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...
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Universal Travel, Inc. borrowed $500,000 on November 1,
2021, and signed a twelve-month note bearing interest at
6%. Principal and interest are payable in full at the maturity
date, October 31, 2022. In connection with this note,
Universal Travel, Inc. should report interest payable
(computed on a monthly basis) at December 31, 2021, in the
amount of:
a. $8,000.
b. $30,000.
c. $5,000.
d. $25,000.
Transcribed Image Text:Universal Travel, Inc. borrowed $500,000 on November 1, 2021, and signed a twelve-month note bearing interest at 6%. Principal and interest are payable in full at the maturity date, October 31, 2022. In connection with this note, Universal Travel, Inc. should report interest payable (computed on a monthly basis) at December 31, 2021, in the amount of: a. $8,000. b. $30,000. c. $5,000. d. $25,000.
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