Davis Corp.invested cash in a 9-month certificate of deposit CD) on October 1, 2015.If Davis has an accounting period which ends on December 31, 2015, when would it most likely recognize interest revenue from the CD?

Question

Quizplus · Accepted Answer

Since the CD has a maturity of 9 months, the interest revenue will most likely be recognized at the end of the accounting periods which fall within the 9-month period. In this case, the accounting periods ending on December 31, 2015 and June 30, 2016 fall within the 9-month period, so interest revenue will be recognized on both dates.