Question

On October 1, 2021, Oberley Corporation loans one of its employees $40,000 and accepts a 12-month, 9% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022.

Answer 1

Answer: Oberley Corporation will recognize in 2021 and 2022 are $900 and $2,700 respectively

Explanation:

Interest Revenue  for 2021

= Principal x rate x time

$40,000 x 9% x  3 / 12 ( This is from October to December 31st year end of 2021)

=$900

Interest Revenue  for 2022

= Principal x rate x time

$40,000 x 9% x  9 / 12 ( This is from January 1st of 2022 to  Octobner 1st , 2022)

=$2,700

 

Therefore, Interest Revenue   Oberley Corporation will recognize in 2021 and 2022 are $900 and $2,700 respectively.