Question

On July 1, 2021, a company loans one of its employees $20,000 and accepts a ten-month, 9% note receivable. Calculate the amount of interest revenue the company will recognize in 2021 and 2022

Answer 1

2021:900

2022:600

Step-by-step explanation:

Month in 2021 - July To December

Interest in 2021 = 20,000x0.0%x(6/12)

Interest in 2021=900

Month in 2022 - January To April

Interest in 2022 = 20,000x0.09x(4/12)

Interest in 2022=600

Therefore the answer for 2021 will be 900 and for 2022 will be 600

Answer 2

Interest in 2021=900

Interest in 2022=600

Step-by-step explanation:

Calculatation of the amount of interest revenue the company will recognize in 2021 2022

Month in 2021 - July To December

Interest in 2021 = 20,000*9%*6/12

Interest in 2021=900

Month in 2022 - January To April

Interest in 2022 = 20,000*9%*4/12

Interest in 2022=600

Therefore the amount of interest revenue the company will recognize in 2021 will be 900 while 2022 will be 600