ANSWERS TO QUESTIONS
(b) (1) Based on interest payable at December 31, 2007, interest is $25 per month or .5% of the note payable. .5% X 12 = 6% interest per year. Salaries Expense, $11,300 less Salaries Payable 12/31/07, $1,300 = $10,000. Total Payments, $17,500 – $10,000 = $7,500 Salaries Payable 12/31/06. EXERCISE 3-13 (10–15 Minutes) ................
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