Question

On August 1, 2018, Deeva, Inc., sold equipment and accepted a six-month, 9%, $50,000 note receivable. Deeva's year-end is December 31. How much interest revenue should Deeva accrue on December 31, 2018

Answer 1

Answer:

$1,875

Explanation:

Given that,

Amount of note receivable = $50,000

Time period = 6 month

Interest rate = 9%

Interest amount:

= Principle amount × Interest rate × Time period

= $50,000 × 0.09 × (6/12)

= $2,250

Interest Accrued from 1 August to 31 December :

= (Interest amount ÷ 6 months) × 5 months

= ($2,250 ÷ 6 months) × 5 months

= $375 × 5 months

= $1,875