You and several classmates are studying for the next accounting examination. They ask you to answer the following questions.
1. If cash is borrowed on a $50,000, 6-month, 12% note on September 1, how much interest expense would be incurred by December 31?
2. How is the sales tax amount determined when the cash register total includes sales taxes?
3. If $15,000 is collected in advance on November 1 for 3 months’ rent, what amount of rent revenue is recognized by December 31?