Question

on april 1, 20x1, nelsen inc. accepts a $100,000, 8% note. the note receivable and interest are due on march 31, 20x2 (one year later). assuming nelson inc. has a december 31 year-end, on march 31, 20x2, nelson inc. will record interest revenue of:

Answer 1

Nelsen Inc. will record interest revenue of $8,000 on March 31, 20X2 for a $100,000 note at an 8% interest rate that is due in one year from its issue date.

Step-by-step explanation:

The student's question involves calculating interest revenue for a note receivable that was accepted by Nelsen Inc. On April 1, 20X1, Nelsen Inc. accepted a $100,000 note at an 8% interest rate, due on March 31, 20X2. Since the note is a one-year note, we can calculate the total interest revenue that will be recorded on March 31, 20X2.

The formula to calculate simple interest is:

Interest = Principal × Rate × Time

Using this formula, we get:

Interest = $100,000 × 8% × 1 year

Interest = $100,000 × 0.08

Interest = $8,000

Therefore, on March 31, 20X2, Nelsen Inc. will record interest revenue of $8,000 for the note receivable.