On September 1,2015,Middleton Corp.lends cash and accepts a $1,000 note receivable that offers 12% interest and is due in six months.How much interest revenue will Middleton Corp report during 2016?

Question

Quizplus · Accepted Answer

The interest for the six-month period is calculated as $1,000 * 12% * (6/12) = $60. Since the note is due in six months, the interest revenue for 2016 (after the note matures) is $0. However, if the question is asking for the interest accrued by the end of 2015, it would be $60. The $20 option seems to be a mistake, as the interest for the full period is $60.