Take-Home Activity #4
Chapter 5
Assume a company has the following information:
Note Receivable: $100,000
Interest Rate: 9%
Year-end: December 31, 2019
1. Calculate the amount of monthly interest revenue for the note.
2. Assume the note was issued on October 1, 2019 and the note term is 6 months. The note matures on
March 31, 2020.
a. How much interest revenue should be recognized in 2019?
b. How much interest revenue should be recognized in 2020?
3. Instead, assume the note was issued on August 1, 2019 and the note term is 9 months. The note
matures on April 30, 2020.
a. How much interest revenue should be recognized in 2019?
b. How much interest revenue should be recognized in 2020?
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