{"id":162682,"date":"2024-11-07T07:40:58","date_gmt":"2024-11-07T07:40:58","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=162682"},"modified":"2024-11-07T07:41:00","modified_gmt":"2024-11-07T07:41:00","slug":"on-november-7-mura-company-borrows-140000-cash-by-signing-a-90-day-10-140000-note-payable","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2024\/11\/07\/on-november-7-mura-company-borrows-140000-cash-by-signing-a-90-day-10-140000-note-payable\/","title":{"rendered":"On november 7, Mura Company borrows $140,000 cash by signing a 90-day, 10%, $140,000 note payable."},"content":{"rendered":"\n<p>On november 7, Mura Company borrows $140,000 cash by signing a 90-day, 10%, $140,000 note payable. 1. Compute the accrued interest payable on december 31. 2.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<p>To compute the accrued interest payable on December 31 for Mura Company&#8217;s 90-day, 10% note payable, we need to break down the information provided and apply the formula for calculating interest on a note.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Information Given:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Principal amount (Note Payable): $140,000<\/li>\n\n\n\n<li>Interest rate: 10% annually<\/li>\n\n\n\n<li>Loan term: 90 days<\/li>\n\n\n\n<li>Date of borrowing: November 7<\/li>\n\n\n\n<li>Interest accrual period: Up to December 31 (since we are calculating interest as of this date)<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Step 1: Calculate the Interest for the Full 90-Day Period<\/h3>\n\n\n\n<p>The formula for calculating interest on a note is:<\/p>\n\n\n\n<p>[<br>\\text{Interest} = \\text{Principal} \\times \\text{Rate} \\times \\text{Time}<br>]<\/p>\n\n\n\n<p>Where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Principal = $140,000<\/li>\n\n\n\n<li>Rate = 10% or 0.10 (annual interest rate)<\/li>\n\n\n\n<li>Time = 90 days (duration of the loan)<\/li>\n<\/ul>\n\n\n\n<p>[<br>\\text{Interest} = 140,000 \\times 0.10 \\times \\left(\\frac{90}{360}\\right)<br>]<\/p>\n\n\n\n<p>Note: The time is expressed as a fraction of the year (360 days in this case, which is commonly used in financial calculations).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 2: Calculate the Accrued Interest for the Period from November 7 to December 31<\/h3>\n\n\n\n<p>The loan is signed on November 7, so we need to calculate how many days have passed from November 7 to December 31. This time period is 55 days (from November 7 to November 30 = 24 days, and December has 31 days, so 31 + 24 = 55 days).<\/p>\n\n\n\n<p>Now, we calculate the interest accrued over the 55 days:<\/p>\n\n\n\n<p>[<br>\\text{Accrued Interest} = 140,000 \\times 0.10 \\times \\left(\\frac{55}{360}\\right)<br>]<\/p>\n\n\n\n<p>[<br>\\text{Accrued Interest} = 140,000 \\times 0.10 \\times 0.15278<br>]<\/p>\n\n\n\n<p>[<br>\\text{Accrued Interest} = 2,140.00<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 3: Provide the Correct Answer<\/h3>\n\n\n\n<p>The accrued interest payable on December 31 is <strong>$2,140.00<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>To determine the interest payable as of December 31, we first calculated the total interest that would accrue over the full 90 days. Since the loan was issued on November 7 and we are interested in the interest accrued by December 31, we used the 55-day period to compute the interest for this specific time frame. The interest formula includes multiplying the principal by the interest rate and adjusting for the time the loan has been outstanding, based on a 360-day year for simplicity in financial calculations.<\/p>\n\n\n\n<p>Thus, the accrued interest payable for the 55 days from November 7 to December 31 is $2,140, which is the amount that Mura Company will owe as of December 31 for the period of the loan so far. This amount will be added to the company&#8217;s liabilities as part of the note payable.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>On november 7, Mura Company borrows $140,000 cash by signing a 90-day, 10%, $140,000 note payable. 1. Compute the accrued interest payable on december 31. 2. The Correct Answer and Explanation is: To compute the accrued interest payable on December 31 for Mura Company&#8217;s 90-day, 10% note payable, we need to break down the information [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-162682","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/162682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=162682"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/162682\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=162682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=162682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=162682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}