On March 1, Hugh Corporation plans to borrow $510,000 from the Scotland State Bank by signing a 6%, 15-year note payable. The note calls for 180 monthly payments of $4,300, which includes both interest and principal components.

1. Hugh's budgeted interest expense for March is:

a. $1750

b. $170

c. $2550

d. $4300

2.Of Hugh's budgeted debt service cost of $4,300 in March, the amount applied to the principal of the note totals:

a. $2550

b. $170

c. $4300

d. $1750

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