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Kale Eichmann

Feb 20, 2025

On June 1, Grey Co. borrows $15,000 cash from National Bank by signing a 120-day, 10% interest-bearing note. Grey will record interest

On June 1, Grey Co. borrows $15,000 cash from National Bank by signing a 120-day, 10% interest-bearing note. Grey will record interest during the year totaling {$blank input field}. Using a 360 day year, round your final answer to the nearest whole dollar.
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$500Explanation:Principal amount = $15000Interest rate = 10% Interest value = 10%*15000$1,500Loan term = 120 daysPro rated interest = 120/365*1500=493.1To the nearest whole dollar $500... Show More
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$500Explanation:The amount of interest to be recorded Grey Co on the  borrowed amount of $15,000 is computed by applying the interest rate of 10% to the amount borrowed while apportioning the 120 days period by multiplying by 120 days and dividing by 360 days as computed below:Interest=$15,000*10%*120/360=$500The interest that Grey Co would record on the $15,000 is $500 during the year using a 360 day per year instead of the usual 365 day which does not make provision for Banks' holidays... Show More
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