Final answer:
The company will recognize $1,200 in interest revenue in 2024 from the nine-month, 8% note receivable of $20,000 using the formula Interest = Principal × Rate × Time.
Step-by-step explanation:
The question is asking us to calculate the interest revenue that a company will recognize in 2024 on a nine-month, 8% note receivable of $20,000. To find the interest revenue, we use the formula:
Interest = Principal × Rate × Time
Where:
- Principal = $20,000
- Rate = 8% (or 0.08 as a decimal)
- Time = 9/12 year (since it's a nine-month note)
Now, let's plug in the values:
Interest = $20,000 × 0.08 × (9/12)
Interest = $20,000 × 0.08 × 0.75
Interest = $1,200
Therefore, the company will recognize $1,200 in interest revenue for the year 2024.