Question

Data on three promissory notes accepted by Sheridan Ltd. during 2021 follow.

Determine the missing amounts.

Date of Note

Term in Months

Principal

Interest Rate

Total Interest

Interest Revenue to Record for Year Ended December 31

Oct. 1

3

$178,800

10%

(c)

(d)

Aug. 1

6

118,800

(b)  %

$4,752

(e)

Nov. 1

24

(a)

6%

11,160

(f)

Can you please help me?

Answer 1

Date	Term in Months	Principal	Interest Rate	Total Interest	Interest Revenue to record at year ended Dec 31
Oct-01	3	$                                 178,800	10%	$                               4,470	$                                    4,470
Aug-01	6	$                                 118,800	8%	$                               4,752	$                                    3,960
Nov-01	24	$                                   93,000	6%	$                             11,160	$                                       930
For Oct-01 Total Interest =$178,800*10%*3/12 =$4,470
For Aug-01 Interest Rate =($4,752/$118,800)*12/6 =0.08 or 8%
For Aug-01 Interest Revenue for 5months =$4,752*5/6 =$3,960
For Nov-01 Principal =($11,160/0.06)*12/24 =$93,000
For Nov-01 Interest Revenue for 2 months =$11,160*2/24 =$930