On Maro 1 2018. Everson services ssued a 10% ong em no es payable or 24 C. t is

Question

On Maro 1 2018. Everson services ssued a 10% ong em no es payable or 24 C. t is payable over 6 year em in S6 C00 annual principal pa ments on March 1 0 each year olus interest be inning March 1 2019. Each year y nstallment will include both principal repayment of S6,000 and interest payment for the preceding one-year period. On March 1, 2019. The accounting period encs on December 31 OA. 0 B. O C. D. Everson must accrue the next note peyment ot $6.00 ss the current portion ot principa payment Everson must accrue $6,DOO of Interest Exense Everson must pay $2 400 of interest to the note nclder Ever son will roceive S6,000 as ar, installment payment

Explanation / Answer

C. Everson must pay $2,400 of interest to the note holder.

Interest payment = $24,000 × 10% = $2,400

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