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9 April, 08:38

TRN sold $40,000, of goods and accepted the customer's $40,000 10%, 1-year note payable in exchange. Assuming 10% approximates the market rate of return, how much interest would be recorded for the year ending December 31 if the sale was made on June 30? a. $0. b. $2,000. c. $4,000. d. $8,000.

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  1. 9 April, 11:16
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    b. $2,000

    Explanation:

    The computation of the interest amount is shown below:

    = Sale value of goods * rate of interest * (number of months : total number of months in a year)

    = $40,000 * 10% * (6 months : 12 months)

    = $2,000

    The 6 months is calculated from June 30 to December 31.

    So, the b option is correct and rest options are wrong.
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