Question: On January 1, 2012, Ace Electronics borrowed $40,000 on a five-year, 7% note. Ace will pay only the interest on the loan on December 31

On January 1, 2012, Ace Electronics borrowed $40,000 on a five-year, 7% note. Ace will pay only the interest on the loan on December 31 each year. The entire principal will be repaid on December 31, 2016, the last interest payment date. Notes payable at December 31, 2013 will be ________ notes payable at December 31, 2012.

A. higher than

B. the same as

C. lower than

D. The answer cannot be determined from the information given.

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