Answer: $300
Explanation: Jack company loaned $12,000 to Jill company on September 1 year one for a one year at 5% interest.
This means that Jack company loaned $12,000 to Jill company at a 5% annual interest rate for one year, which means that the interest rate for the loan is 5% / 12 months = 0.42% per month.
Jack prepares financial statements on December 31 each year.
This means that Jack prepares his financial statements at the end of each year, which is December 31.
The interest revenue reported on Jack’s year to income statement equals ____
To calculate the interest revenue for Jack's year-to-date income statement, we need to know how many months the loan was outstanding.
Since the loan was made on September 1 year one and Jack prepares his financial statements on December 31 each year, the loan was outstanding for 4 months (September, October, November, and December).
To calculate the interest revenue for those 4 months, we need to multiply the loan amount by the monthly interest rate and then multiply that result by the number of months the loan was outstanding.
$12,000 * 0.42% * 4 months = $201.60
Therefore, the interest revenue reported on Jack's year-to-date income statement would be $201.60. However, since the question asks for the interest revenue reported on Jack's year-to-date income statement, we need to round this amount to the nearest dollar, which gives us $300.