On June 1, Edison, Inc. borrowed $24,000 on a one-year Note

On June 1, Edison, Inc. borrowed $24,000 on a one-year Note Payable with an interest rate of 10% per year. It will repay the principal and interest at the end of the one-year period. The company makes accrual adjustments at the end of each month

The company should record interest expense of $2,400 on June 30.
Indicate whether the statement is true or false

ANSWER

FALSE .Interest Expense = ($24,000 × 10%) / 12 = $200