- CFA Exams
- CFA Level I Exam
- Study Session 7. Financial Reporting and Analysis (2)
- Reading 22. Understanding Balance Sheets
- Subject 1. Components and Format of the Balance Sheet
CFA Practice Question
On September 1, 2016, OGR Company issued a note payable to National Bank in the amount of $225,000, bearing interest at 12% per annum, and payable in 3 equal annual principal payments of $75,000 plus interest. The first payment for interest and principal was made on September 1, 2017. What amount of accrued interest payable should OGR record on December 31, 2017?
A. $5,500
B. $6,000
C. $9,000
Explanation: It would be necessary to accrue for September, October, November, and December. ($150,000 x 0.12 x 4 /12) = $6,000
User Contributed Comments 1
| User | Comment |
|---|---|
| Xocrevilo | 150000 = 225,000 - 75000. |