Question

On September 1, 2021, Middleton Corp. lends cash and accepts a $10,000 note receivable that offers 18% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2022? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

Answer 1

Answer:

Interest revenue yr2022= $300

Explanation:

From Sep 1 to end of year 2021, Middleton Corp. will have accrued interest for  4 months; meaning, the following year(2022), the interest revenue to be recorded will be for the remaining 2 months.

Therefore,

Interest revenue yr2022= $10000 * 18% * 2/12

Interest revenue yr2022= $300