Answer:
The amount of interest expense which is to be reported in the Income statement in the year 2020 is $1,075
Explanation:
The amount of interest expense is computed as:
Interest expense = Amount of note payable × Interest rate × Number of months / 12
where
Amount of note payable is $43,000
Interest rate is 10%
Number of months is 3 (From October to December because it is a Calendar year)
Putting the values in the above:
= $43,000 × 10% × 3/ 12
= $4,300 × 3/ 12
= $1,075
