Answer: $18
Step-by-step explanation:
From the question, we are informed that On November 1, 2019, a firm accepted a 5-month, 10 percent note for $1,080 from a customer with an overdue balance.
The accrued interest recorded for this note for the year ended December 31, 2019 goes thus:
The value of notes receivable is $1080, then the interest for 5 months will be:
= ($1080 × 10% ×5)/100 × 12
= $54000/1200
= $45
We are further told that the interest accrued from November 1, 2019 to December 31, 2019. This means that it was for 2 months. The accrued interest will now be:
= $45 × 2/5
= $90/5
= $18