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Interest question accounting?

Four Oaks Golf Inc. was organized on July 1, 2012. Quarterly financial statements are prepared. The trial balance and adjusted trial balance on September 30 are shown here.

FOUR OAKS GOLF INC.

Trial Balance

September 30, 2012

Notes Payable $5,000

Interest Expense $50

Interest Payable $50

If the note bears interest at 12%, how many months has it been outstanding?

thank you

Update:

yea for some reason i thought it was 12% per month and i did

50/5000 = 1%, x12 = 12 months, lol

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Best answer

50 / 5,000 = 1%

Since the interest rate is 12% per year and 1% is 1/12 of 12%, the note has been outstanding for one month.

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