Problem: On June 1, 2004, ABC Company borrowed $40,000 from a bank on a 9%, 9-month note payable. Calculate the amount of interest expense reported by ABC Company in its   2005 income statement related to this loan.

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On June 1, 2004, ABC Company borrowed $40,000 from a bank on a 9%, 9-month note payable.

Calculate the amount of interest expense reported by ABC Company in its   2005 income statement related to this loan.