On June 8, Alton Co. issued an $60,800, 12%, 120-day note payable to Seller Co. Assume...

On June 8, Alton Co. issued an $60,800, 12%, 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.

$7,296

$1,986

$608

$1,216

Solutions

Expert Solution

Total Interest revenue = $60,800 * 12% * 120 / 360 = $2,432

The amount of interest revenue recognized by Seller in the following year = $2,432 * 98 / 120 = $1,986

ekkarill92 answered 1 year ago

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