Question

On September 1, 2021, Daylight Donuts signed a $188,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022. Daylight Donuts should report interest payable at December 31, 2021, in the amount of: (Do not round your intermediate calculations.)

Answer 1

Answer:$3,760--- Interest payable at December 31, 2021.

Explanation:

Interest payable is current  liability recorded on a firm's balance sheet that shows  the amount of interest which a firm owes currently but has not yet paid as of the date recorded on the of the balance sheet.

For daylight donuts

September --- December = 4 months

interest payable  within the four months= $188,000 X 6% X 4/12= $3,760

Daylight Donuts should report interest payable at December 31, 2021, in the amount of $3,760