Kieso Company borrowed $800,000 for five months. The annual interest rate on the loan was 13%. Kieso's fiscal year ends on December 31.

Kieso Company borrowed $800,000 for five months. The annual interest rate on the loan was 13%. Kieso's fiscal year ends on December 31. Kieso borrowed the $800,000 one month prior to the end of its last fiscal year and paid the $800,000 plus interest back four months into its current fiscal year.
 

How much interest expense, if any, would Kieso report at the end of its last fiscal year and at the end of its current fiscal year?

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Explanation:

Last year: $800,000 × 0.13 × 1/12 = $8,667

Current year: $800,000 × 0.13 × 4/12 = $34,667