Georgia International borrowed $1,000,000 for eight months from its bank during the current year. Interest is payable in full on the due date of the note
Required: Determine the amount of interest expense for the current year based on the following borrowing dates, fiscal year end dates, and interest rates.
Borrowing Date
Year-End Date
Interest Rate
Interest Expense
June 1
October 31
10%
September 30
December 31
6%
August 1
December 31
8%
May 1
August 31
9%
What will be an ideal response?
Answer:
Borrowing Date
Year-End Date
Interest Rate
Interest Expense
June 1
October 31
10%
$41,667
September 30
December 31
6%
$15,000
August 1
December 31
8%
$33,333
May 1
August 31
9%
$30,000
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