Question

trying to determine interest expense on:

a 10,000 note with 6%interest made on jan 31 2017 and is due feb 1 2019. a 5 year loan was made on june 1 2017. Terms are 7.5% annual rate and interest only until due date.

Answer 1

Particulars	Amount ($)
Interest on Note
Notes payable	10,000.00
Annual Rate of interest	6%
Period of interest (Feb 01, 2017 to Feb 01, 2019)	2 years
Thus, interest expense (10000 x 6%) x 2	1,200.00
Interest on 5 year loan
Amount of loan (Assumption)	10,000.00
Annual Rate of interest	7.50%
Period of loan	5 years
Thus, interest expense (10000 x 7.5%) x 5	3,750.00