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11 January, 03:14

On September 1, 2021, Middleton Corp. lends cash and accepts a $2,100 note receivable that offers 8% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2021? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

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  1. 11 January, 03:25
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    Interest revenue = $56

    Explanation:

    Interest on note receivable calculation:

    Note receivable amount * Interest rate * Numbers of period

    Given,

    Note rwceivable amount = $2100

    Interest rate = 8%

    Number of period = 6 month

    Putting the values into the formula we can get

    Interest on note receivable calculation = $2100 * 8% * (6/12)

    = $168 * (6/12)

    Interest for the notes Receivable for 6 months = $84

    The note receivable will be matured on March 1 2022. But we have to calculate the interest for 2021. Therefore Middleton Corp. Will report interest revenue = $84 * (4/6)

    = $56
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