Reference no: EM131909853

Problem - The Eldorado Corporation's controller prepares adjusting entries only at the end of the fiscal year. The following adjusting entries were prepared on Dec 31, 2013:

Debit Credit

Interest expense 7200

Interest payable 7200

Rent expense 35,000

Prepaid rent 35,000

Interest receivable 500

Interest revenue 500

Additional Information:

1. The company borrowed $120,000 on Mar 31, 13. Principal and interest are due on Mar 31, 14. This note is the company's only interest bearing debt.

2. Rent for the year on the company's office space is $60,000. The rent is paid in advance.

3. On Oct 31, 13, Eldorado loan money to a customer. The customer signed a note with principal and interest at 6% due in one year.

Required: Determine the following:

1. What is the interest rate on the company's note payable?

2. The 2013 rent payment was made at the beginning of which month?

3. How much did Eldorado lend its customer on Oct 31?