Carlock Systems received a 6-month, 12% note for $50,000 from a customer on November 1, 2013. The note is due on April 30, 2014. Assuming the company's accounting period ends on December 31, how much interest revenue should be recognized during 2013 and 2014? 2013 2014

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Quizplus · Accepted Answer

Interest for 2013 is calculated for 2 months (November and December): $50,000 * 12% * (2/12) = $1,000. Interest for 2014 is calculated for 4 months (January to April): $50,000 * 12% * (4/12) = $2,000.

Carlock Systems Received a 6-Month, 12% Note for $50,000 from a Customer