Question

A sixminusmonth note receivable for $ 7 comma 000 at 12​%, dated October​ 1, 2020, has accrued interest revenue of​ ________ as of December​ 31, 2020.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

Answer 1

The accrued interest revenue is $210

Step-by-step explanation:

The period of interest is from 1 October,2020 to 31 December ,2020,which translates into 3 months of interest accrued overall.

The interest accrued can be computed using the formula below:

interest accrued=note receivable amount*interest rate*number of applicable months/12

note receivable amount is $7,000

interest rate is 12%

applicable months is 3

interest accrued=$7,000*12%*3/12

=$210

The accrued interest revenue is $210 as shown above.

The timeline of 3 months is the key to unlocking the question.