Question

on april 1, 2021, a company loans one of its suppliers $58,000 and accepts a 29-month, 14% note receivable. calculate the amount of interest revenue the company will recognize in 2021, 2022, and 2023. (do not round intermediate calculations. round your final answers to the nearest whole dollar.)

Answer 1

The amount of interest revenue the company will recognizes: For 2021 it will be $4680, for 2022 it will be $6240, and for the 2023 it will be $4680.

What is interest revenue?
The income that an organisation receives from every investments it makes or on debt it owns is known as interest revenue. A business must record interest revenue underneath the accrual basis of accounting even if it has not yet received payment in cash for the interest as long as it has earned this same interest; this is done through an accrual journal entry. Interest revenue is only recorded under the cash basis of accounting when the entity receives a cash payment for interest.

For instance, if a business uses the accrual method of accounting, it might spend $10,000 on a certificate of deposit that yields 6% interest and generates $600 in interest income after a year.

The amount of interest revenue the company will recognizes :
2021 => $52000 × 12% × 9/12 = $4680
2022 => $52000 × 12% × 12 = $6240
2023 => $52000 × 12% × 9 /12 = $4680

To learn more about interest revenue
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