Financial Accounting

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Notes Payable: Determining Principal Full Year Interest


ABC Company signs a 2-year 8% interest-bearing note on January 1, 20x4. No interest or principal payments have been made during the year.

If ABC reports Interest Payable in the amount of $5,200 on the Balance Sheet at December 31, 20x4, what amount did the company borrow on January 1, 20x4?