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On September 1, 2021, Middleton Corp. lends cash and accepts a $2,100 note receivable that offers 8% interest and is due in six months. How much interest revenue will Middleton Corp. report during 2021? (Do not round intermediate calculations. Round your answer to the nearest dollar amount.)

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jafransp

Answer:

Interest revenue = $56

Explanation:

Interest on note receivable calculation:

Note receivable amount × Interest rate × Numbers of period

Given,

Note rwceivable amount = $2100

Interest rate = 8%

Number of period = 6 month

Putting the values into the formula we can get

Interest on note receivable calculation =$2100 × 8% × (6/12)

= $168 × (6/12)

Interest for the notes Receivable for 6 months = $84

The note receivable will be matured on March 1 2022. But we have to calculate the interest for 2021. Therefore Middleton Corp. Will report interest revenue = $84 × (4/6)

= $56

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