Final answer:
The company will recognize $800 in interest revenue for 2015 and $400 for 2016 from the $20,000 loan with a 9-month 8% note receivable.
Step-by-step explanation:
To calculate the amount of interest revenue the company will recognize in 2015 and 2016, we use the formula for simple interest: Interest = Principal × Rate × Time. The loan is for $20,000 at an 8% annual interest rate, and the note receivable is for nine months.
First, we need to calculate the total interest for the nine-month period:
Total Interest = $20,000 × 8% × (9/12)
Total Interest = $20,000 × 0.08 × 0.75
Total Interest = $1,200
Since the loan spans over two years (2015 and 2016), we need to apportion the interest for each year:
Interest for 2015 (July 1 to December 31, six months):
Interest 2015 = $1,200 × (6/9)
Interest 2015 = $800
Interest for 2016 (January 1 to March 31, three months):
Interest 2016 = $1,200 × (3/9)
Interest 2016 = $400
The company will recognize $800 in interest revenue for 2015 and $400 for 2016.