On June 8, Alton Co. issued an $68,100, 11%, 120-day note payable to Seller Co. Assume...

On June 8, Alton Co. issued an $68,100, 11%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using a 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year? When required, round your answer to the nearest dollar.

$624

$1,249

$7,491

Expert Solution

Solution:

Period of note = 120 days

Days in current year = From 8 june to 30th june = 22 days

Days in following year = 120 - 22 = 98 days

Interest revenue recognized by seller in the following year = $68,100 * 11% *98/360 = $2,039

ekkarill92 answered 2 years ago

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