question archive A Better Mousetrap The company sold merchandise to a customer on December 1, 2012, for $100,000
A Better Mousetrap The company sold merchandise to a customer on December 1, 2012, for $100,000
Subject:AccountingPrice:3.89 Bought19
A Better Mousetrap The company sold merchandise to a customer on December 1, 2012, for $100,000. The customer paid with a promissory note that has a term of 6 months and an annual interest rate of 9%. The company's accounting period ends on December 31. Refer to A Better Mousetrap. What amount should the company recognize as interest revenue on December 31, 2012? A. $ -0- B. $ 750 C. $1,500 D. $9,000 100. A Better Mousetrap The company sold merchandise to a customer on December 1, 2012, for $100,000. The customer paid with a promissory note that has a term of 6 months and an annual interest rate of 9%. The company's accounting period ends on December 31. Refer to A Better Mousetrap. What amount should the company recognize as interest revenue on the maturity date of the note? A. $ -0- B. $4,500 C. $3,750
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Answer 99
Interest Revenue to be recognized on December 31, 2012 = Principal amount * Interest rate * Time
- Time = 1 Month
Interest Revenue to be recognized on December 31, 2012 = 100000 * 9% * 1/12 = 750
Answer 100
Interest Revenue to be recognized on Maturity date of the note = Principal amount * Interest rate * Time
- Time = Balance number of months after December 31 = 5 Months
Interest Revenue to be recognized on Maturity date of the note = 100000 * 9% * 5/12 = 3750
