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Unformatted text preview: The premium expense for 2010 is Your Answer: $25,000. $30,000. $35,000. $50,000. CORRECT Instructor Explanation: [(500,000 X .4) 8] X $2 = $50,000. Chapter 13. Points Received: 4 of 4 3. Question: (TCO D) On September 1, 2010, Herman Co. issued a note payable to National Bank in the amount of $1,200,000, bearing interest at 12% and payable in three equal annual principal payments of $400,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2011. At December 31, 2011, Herman should record accrued interest payable of Your Answer: $48,000. $44,000. $32,000. CORRECT ANSWER $29,334. Instructor Explanation: $800,000 x .12 x 4/12=$32,000. Chapter 13. Points Received: 0 of 4 4. Question: : 4 of 4...
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 Spring '10
 GOR

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