Exercise 8-5 Determine interest expense (LO8-2)

OS Environmental provides cost-effective solutions for managing regulatory requirements and environmental needs specific to the airline industry. Assume that on July 1 the company issues a one-year note for the amount of $6 million. Interest is payable at maturity.

Required:

Determine the amount of interest expense that should be recorded in a year-end adjusting entry under each of the following independent assumptions: (Enter your answers in dollars, not in millions (i.e. 5 should be entered as 5,000,000).)

Interest Rate Fiscal Year-End Interest Expense December 31 11% 9% 10% 7% 2. 3. October 31 January 31