ABC Company adjusts its accounts at the end of each month. The following information is provided in
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Question:
ABC Company adjusts its accounts at the end of each month. The following information is provided in order to prepare the adjusting entries at October 31:
(1) A one-year bank loan of $360,000 at an annual interest rate of 12% had been obtained on October 1.
(2) On October 1 rent on the office building had been paid for 12 months. Monthly rent was $2,160.
(3) Fees of $2,340 were earned during the month for clients who had paid in advance.
What amount of interest expense has accrued on the bank loan as of October 31?
Select one:
a. $2,400
b. $4,200
c. $3,600
d. $3,000
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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