# Oriole Company borrowed $403,000 on April 1. The note requires interest at 12% and principal to... ## Question: Oriole Company borrowed$403,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?

a. $0. b.$32,240.

c. $36,270. d.$48,360.

## Note Payable:

Note payable is recorded as a liability for a company. It may recorded as a long-term liability or a short-term liability which depends on the maturity period of the note payable.

The correct answer is option (b).

The interest of $32,240 would be recognized for the period from April 1 to December 31. Explanation: The interest of$32,240 (\$403,000 x 12% x 8/12) would be recognized for the period from April 1 to December 31.