On March 1, 2016, Emerson Services issued a 4% long-term notes payable for $16,000
It is payable over a 4-year term in $4,000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2017. Each yearly installment will include both principal repayment of $4,000 and interest payment for the preceding one-year period. On March 1, 2017, ________. The accounting period ends on December 31.
A) Emerson must accrue $4,000 of Interest Expense
B) Emerson must accrue the coming $4,000 as the current portion of principal payment
C) Emerson must pay $640 of interest to the note holder
D) Emerson will receive $4,000 as an installment payment
C .Interest payment = $16,000 x 4% = $640
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