Answer:
Oberley Corporation
Amount of interest revenue that Oberley will recognize in 2021 and 2022 are:
2021: $400
2022: $1,200
Step-by-step explanation:
Amount of employees' loans = $20,000
Duration of loans = 12-month
Interest rate = 8%
Date of loans = October 1, 2021
Interest revenue = $20,000 * 8% = $1,600
2021 revenue = $1,600 * 3/12 = $400
2021 revenue = $1,600 * 9/12 = $1,200
b) The interest revenue is calculated as 8% of $20,000. This amount is then apportioned according to the number of months that it is consumed. It is consumed for 3 months in 2021 and 9 months in 2022. This agrees with the matching and accrual principles of generally accepted accounting principles.