Question - Staven Company sells a seasonal product. Each year, it needs additional cash in order to stock up on inventory before its season begins. On May 1, 2010, Staven Company borrows money from its bank by signing a 11-month, 6% note for $54,000. The interest and principal are due at maturity. Calculate interest based on number of months rather than days. If required, round your answers to the nearest cent.
What is the amount of accrued interest that Staven will record on December 31, 2010?
What is the amount of total interest that Staven will pay at maturity for the note?