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You received a 4-month, 6%, $10,000 note on 10/1/2015. Your accounting period starts at 1/1 and ends at 12/31. How much interest revenue did you earn during 2015 on this note?

a. $150
b. $50
c. $200
d. $600

1 Answer

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Final answer:

To calculate the interest revenue earned on the note receivable in the 2015 accounting period, multiply the principal of $10,000 by the annual interest rate of 6% and the time factor for the remainder of the year. The correct amount of interest revenue earned is $150, option (a).

Step-by-step explanation:

The question involves calculating the interest revenue earned during a particular accounting period on a note receivable. The note was a 4-month, 6%, $10,000 note received on October 1, 2015. We'll need to determine the amount of interest that will accrue from October 1 until December 31 (the end of the accounting period).

The formula for simple interest is: Interest = Principal × Rate × Time. For this note, the Principal is $10,000, the annual Rate is 6%, and the Time (in years) for the 2015 accounting period would be 3 months out of 12, or 0.25 years.

So, we'll calculate the interest revenue as follows:
Interest = $10,000 × 0.06 × 0.25 = $150

Therefore, the interest revenue earned during 2015 on this note is $150, which corresponds to option (a).

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