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Vikki [24]
3 years ago
9

On November 1, year 1, ABC, Inc., received a 3-month, 8%, $1,500 note receivable with interest and principal to be collected on

February 1 of year 2. What is the amount of interest revenue that should be recorded for year 1
Business
1 answer:
OverLord2011 [107]3 years ago
7 0

Answer:

The amount of interest revenue that should be recorded for year 1 is $20.

Explanation:

  • A note otherwise known as promissory note is an unconditional written promise by a borrower to a lender (payee) to pay a certain agreed sum at a specific date.
  • The interest revenue on notes receivable is calculated by Principal x Interest rate x Time period
  • In the case of ABC, Inc., the interest revenue to be recorded for year 1 (November 1 - December 31) is calculated as follows: $1,500 x 8%/12 = $10 monthly. For the 2 months, it is $10 x 2 months = $20.
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7 0
3 years ago
On January 1, Year 1, Price Co. issued $190,000 of five-year, 6 percent bonds at 96½. Interest is payable annually on December 3
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Answer:

a) Cash received = $183,350

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c)

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5 0
3 years ago
Read 2 more answers
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