Keesha Co. borrows $135,000 cash on December 1, 2017, by signing a 150-day, 9% n

Question

Keesha Co. borrows $135,000 cash on December 1, 2017, by signing a 150-day, 9% note with a face value of $135,000 1. On what date does this note mature? (Assume that February has 28 days) April 25, 2018. O April 26, 2018. O Aprll 27, 2018. April 28, 2018. O April 30, 2018. 2. & 3. What is the amount of Interest expense In 2017 and 2018 from this note? (Use 360 days a year. Round final answers to the nearest whole dollar.) Total through maturity Interest Expense 2017 Expense 2018 Interest Principal Rate (%) Time Total interest

Explanation / Answer

1. 30 April ,2018 , 150 days from 1 December,2017 that is 30 days of December 2017 , 31 days of January ,2018 , 28 days of February , 31 days of March and remaining of April 2018 .Therefore, 30th April,2018 will be maturity date

2 & 3 .

30 / 360 days

Total through maturity Interest expense 2017 Interest expense 2018 Principal 135000 135000 135000 Rate (%) 9% 9% 9% Time 150 / 360 days

30 / 360 days

120 / 360 days Total Interest $5063 $1013 $4050

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