Register
On September 1 of the current year, a bank lends $1,600 to a company; the note principal and $192 ($1,600 × 12 percent) annual interest are due in one year. Answer from the bank's standpoint.
202k views
2 votes
On September 1 of the current year, a bank lends $1,600 to a company; the note principal and $192 ($1,600 × 12 percent) annual interest are due in one year. Answer from the bank's standpoint.

User Ashish Chopra
by
6.2k points

1 Answer

1 vote

Answer and Explanation:

Revenue recognized - $192. Revenue title - "Interest revenue" This is answered considering that the bank follows accrual basis of accounting. Therefore, as the bank has earned the interest by lending to the company, it can recognize the interest revenue. And as it is a bank, the interest revenue would be shown under the "Revenue" section as its main business is lending. The principal will not be revenue at all as it is an Asset and will be regarded as Accounts Receivable.

User Sajith Silva
by
5.8k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

6.5m questions

8.6m answers

Other Questions

One reason that businesses want to combine with other businesses is to A. avoid taxes. B. delay expenses. C. hire more workers. D. reduce expenses.
Which of the following possesses the sole power to create revenue bills?
Which of the following is an example of a fixed expense? A.) Clothing B.) Rent C.) Food D.) Entertainment
A ______ is "the basic interpretive mechanism to let people know what an organization is doing and are sent out to editors and reporters in hopes of stimulating favorable stories about their organizations"
All of the following are fees typically charged by credit card companies EXCEPT: A. Late payment fee B. Balance Transfer fee C. Annual membership fee D. Reload fee
Link Copied!