Problem
Jesse Company adjusts its accounts monthly and closes its accounts on December 31. On October 31, 2015, Jesse Company signed a note payable and borrowed $120,000 from a bank for a period of six months at an annual interest rate of 6 percent.
a. How much is the total interest expense over the life of the note?
b. How much is the monthly interest expense? (Assume equal amounts of interest expense each month.)