Question

Record the following LO 6 note receivable transactions in the journal of Mediterranean Services. How much interest revenue did Mediterranean earn this year? Use a 365-day year for interest computations, and round interest amounts to the nearest dollar. Mediterranean Services has a December 31 fiscal year-end Loaned $21,000 cash to Brandy Shields on a one-year, 10 % note . Performed service for Lawn Pro, receiving a 90-day, 9 % note for $5,000. Received a $4,000, six-month, 11 % note on account from Peabody Company Accrued interest revenue for the year. Oct Dec 6 16 31

Answer 1

578.22

Step-by-step explanation:

Oct 1st $ 21,000 at 10%

Dec 6th $ 5,000 at 9%

Dec 16th $ 4,000 at 11%

Principal x rate x time = interest

being rate and time expressed in the same metric.

21,000 x 0.10 x (31 + 30 + 31)/365 = 529.3150685

5,000 x 0.09 x (31-6)/365 = 30.82191781

4,000 x 0.11 x (31 - 16)/365 = 18.08219178

Total interest accrued: 578.2191781