On November 1, 2012, The Bagel Factory signed a $100,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on May 1, 2013. The Bagel Factory records the appropriate adjusting entry for the note on December 31, 2012. In recording the payment of the note plus accrued interest at maturity on May 1, 2013, The Bagel Factory would

A. Debit Interest Expense, $2,000.

B. Debit Interest Expense, $1,000.

C. Debit Interest Payable, $2,000.

D. Debit Interest Expense, $3,000.

Interest expense in 2013 = [($100,000 x 6%) x 4/12] = $2,000.

Can someone explain why 4 months? I don't see how that happens. Are you counting Jan, Feb, March, April?

On September 1, 2012, Daylight Donuts signed a $100,000, 9%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2013. Daylight Donuts should report interest payable at December 31, 2012, in the amount of: A. $0. B. $1,500. C. $3,000. D. $4,500.

[($100,000 x 9%) x 4/12] = $3,000.

But then this doesn't work on this one? I don't get it, please help!