On June 1, 2014, Siebens Enterprises loaned $20,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory note, Tyler will repay the principal and pay one year's interest on May 31, 2015.
What would be the total amount of receivables on Siebens' December 31, 2014 balance sheet?
A) $20,000
B) $21,600
C) $20,933
D) $20,800

Question

Quizplus · Accepted Answer

The total amount of receivables includes the principal and the interest accrued by December 31, 2014. The interest for 7 months (June to December) is $20,000 * 8% * (7/12) = $933.33. Therefore, the total receivables are $20,000 + $933.33 = $20,933.33, rounded to $20,933.

On June 1, 2014, Siebens Enterprises Loaned $20,000 to Tyler