On October 1, 2021, Oberley Corporation loans one of its employees $39,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022.

2021 $975

2022 $2925

Explanation:

Assuming that the financial year of the Oberly Corporation is from January to December.

The amount of interest revenue that will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2021 will be as follows:

Interest Revenue=Principal amount*interest rate*3/12

Interest Revenue=39000*10%*3/12=$975

Since the Oberly Corporation has extended loan to its employee on October 1,2021, therefore only interest revenue 3 months will be recognised in the year ended December 31, 2021.

The amount of interest revenue for the remaining 9 months will be recognised by the Oberly Corporation in its financial statements for the year ended December 31, 2022 and will be as follows:

Interest Revenue=39000*10%*9/12=$2,925