On April 1, 2021, a company loans one of its suppliers $50,000 and accepts a 24-month, 12% note receivable. Calculate the amount of interest revenue the company will recognize in 2021, 2022, and 2023

2021, $4,500: 2022, $ 6,000; and 2023 $1500

Explanation:

In 2021, the company will recognize an interest for nine months.

Using the simple interest formula, the firm will recognize

Interest = p x r x t

i=$50,000 x 12/100 x 9/12

=50,000 x0.12 x 0.75

=$4,500.

In 2022, the company should recognize an interest for 12 months / one year

=$50,000 x 12/100 x1

=50,000 x 0.12 x 1

=$6,000

In 2023, the company should recognize an interest for (24 - (12+9) months

=$50,000 x 0.12 x 3/12

=$6000 x 0.25

=$1500