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Baker Inc. acquired equipment from the manufacturer on 10/1/2016 and gave a noninterest-bearing note in exchange. Baker is obligated to pay $918,000 on 4/1/2017 to
Baker Inc. acquired equipment from the manufacturer on 10/1/2016 and gave a noninterest-bearing note in exchange. Baker is obligated to pay $918,000 on 4/1/2017 to satisfy the obligation in full. If Baker accrued interest of $9,000 on the note in its 2016 year-end financial statements, what is its approximate imputed annual interest rate?
a. 2%
b. 4%
c. 6%
d. 8%
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