Ask Question
22 July, 02:19

On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due in six months. At December 31, Black should record interest revenue of:

A. $0

B. $300

C. $600

D. $1,200

+4
Answers (1)
  1. 22 July, 02:21
    0
    B. $300

    Explanation:

    The interest revenue is computed below:

    = Principal * rate of interest * number of months : (total number of months in a year)

    = $20,000 * 6% * (3 months : 12 months)

    = $300

    The 6 months is calculated from October 1 to December 31

    Simply we use the simple interest formula by considering the principal amount, rate of interest and time period so that the correct revenue can be computed
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On October 1, Black Company receives a 6% interest bearing note from Reese Company to settle a $20,000 account receivable. The note is due ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers