On June 1, 2017, Carr Corp.loaned Farr Corp.$600,000 on a 5% note, payable in five annual instalments of $120,000 (plus interest), beginning January 2, 2018.Interest on the note is payable on the first day of each month beginning July 1, 2017.Farr made timely payments through November 1, 2017.On January 2, 2018, Carr received payment of the first principal instalment plus all interest due.At December 31, 2017, Carr's interest receivable on this loan is

Question

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Interest for December 2017 is $600,000 x 5% / 12 = $2,500. Interest for January 1, 2018 is $600,000 x 5% / 12 = $2,500. Total interest receivable at December 31, 2017 is $5,000.