On November 1,Jovel Company loaned another company $100,000 at a 6.0% interest rate.The note receivable plus interest will not be collected until March 1 of the following year.The company's annual accounting period ends on December 31.The amount of interest revenue that should be reported in the first year is:
A)$0.
B)$6,000.
C)$5,000.
D)$16,667.
E)$1,000.

Question

Quizplus · Accepted Answer

The interest for two months (November and December) is calculated as $100,000 * 6% * (2/12) = $1,000.

On November 1,Jovel Company Loaned Another Company $100,000 at a 6.0