Financial Accounting

Free Version

Upgrade subject to access all content


Notes Payable: Determining Interest Rate Partial Year Interest


XYZ Company signs a 2-year, interest-bearing note on September 1, 20x4 for \$35,000. No interest or principal payments have been made during the year.

If XYZ reports Interest Payable in the amount of $1,400 on the Balance Sheet at December 31, 20x4, what is the annual interest rate of interest on the note?