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What will be the amount charged to interest expense

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Question - Montreal Express Inc. (MEI) purchased a waste management system on September 20, 20X7 and paid for the purchased by issuing a $100,000, 0% note payable to the supplier due on September 20, 20X8. The market rate of interest for borrowing of this nature is 5%. What will be the amount charged to interest expense for MEI's year-ended December 31, 20X7 pertaining to this note payable?

a. $1,331

b. $1,344

c. $1,397

d. $1411

Reference no: EM132565675

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