On September 1,2018,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 2018?

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Quizplus · Accepted Answer

The interest revenue for 2018 can be calculated using the formula: Interest = Principal x Rate x Time. Here, Principal = $1,000, Rate = 12% (or 0.12), and Time = 4 months (since the note is issued on September 1 and the year ends on December 31, which is 4 months). Thus, Interest = $1,000 x 0.12 x (4/12) = $40.