The money charged for the use of funds.
Tom needs $100,000 to start a business. The bank says they will loan him the money at 15% interest. This means that every year Tom has to pay the bank $15,000 (.15 x $100,000) until the money is repaid. The $15,000 is interest expense.
Sign Up to Learn More!
Join our mailing list today to get notified of new discount offers, course updates, Roger CPA Review news, and more!