QUESTION 6

Brazos Company issued a 3-year, 5%, note payable for $75,000 on January 1, 2013. The note requires that Brazos make equal payments to principal on December 31 each year, plus interest on the unpaid balance.

What amount of interest expense will Brazos Company report for 2103?

	a.	$7,500
	b.	$3,750
	c.	$2,500
	d.	$0
	e.	none of the above

Refer to the information above for Brazos Company. What is the total amount of interest expense that Brazos will report over the 3-year life of this note?

	a.	$22,500
	b.	$11,250
	c.	$7,500
	d.	$1,250
	e.	none of the above