Corporation borrows cash by signing a $90,000, 8%, eight-month note on December 1 with its local bank. The total cash paid for interest (only) at the maturity of the note by Lexter will be: a. $600
b. $3,600
c. $4,800
d. $7,200

c. $4,800

Explanation:

Loan Note is the promissory document to repay a specific amount of loan after a specific time period along with interest applicable to the loan value using a specified rate.

Interest amount can be calculated as follow

Interest = Loan Note's face value x Interest rate x Numbers of months upto maturity / NUmbers of months in a year

Placing values in the formula

Interest = $90,000 x 8% x 8/12

Interst = $4,800

statement of owner's equity;

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