Land Shoes
Land Shoes received a promissory note from a customer on July 1, 2012. The face value of the note is $45,000; the terms are 12 months and 10% annual interest.
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Refer to the information provided for Land Shoes. How much interest revenue will Land Shoes recognize for the year ended December 31, 2012?

Question

Land Shoes 
Land Shoes received a promissory note from a customer on July 1, 2012. The face value of the note is $45,000; the terms are 12 months and 10% annual interest.
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Refer to the information provided for Land Shoes. How much interest revenue will Land Shoes recognize for the year ended December 31, 2012?

Quizplus · Accepted Answer

The interest revenue for the year ended December 31, 2012, is calculated for 6 months (from July 1 to December 31) at 10% annual interest on $45,000. The interest for 6 months is $45,000 * 10% * (6/12) = $2,250.

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