Answered: At the maturity of a note payable, a…

At the maturity of a note payable, a borrower will pay ________. A. the interest amount only B. the principal plus interest C. the principal amount only D. the principal minus interest

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 14RQ

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

At the maturity of a note payable, a borrower will pay ________.

the interest amount only

the principal plus interest

the principal amount only

the principal minus interest

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