Compute interest expense for the year

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Question 1: Compute interest expense for the year but you are not sure if doing it correctly. working on the adjusting entries for December 31, 2017.

point 1: First,  have a note payable for $10,000 at 6% that was made on January 31, 2017 and is due on February 1, 2019.

point 2: Next,  have a five year loan for $21,000 at 7.5% annual rate, interest only until the due date. The loan was taken on June 1, 2017 and is due June 1, 2022.

point 3: So for the note payable, I have $10,000 x 0.06 x 11/24(months) = $269

point 4: And the loan  have $21,000 x 0.075 x .5/5 = $157.5 which seems really low given the principle is double the note payable.  don't think doing this one correctly.

Reference no: EM132472185

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