Rosewood company made a loan of $12,800 to one of the company’s employees on Apr
ID: 2594638 • Letter: R
Question
Rosewood company made a loan of $12,800 to one of the company’s employees on April 1, 2016. The one year note carried a 6% rate of interest. The amount of interest revenue that Rosewood would report in 2016 and 2017, respectively, would be: A: 768, 0 B: 192, 576 C: 0, 768 D: 576, 192 (In dollars)Rosewood company made a loan of $12,800 to one of the company’s employees on April 1, 2016. The one year note carried a 6% rate of interest. The amount of interest revenue that Rosewood would report in 2016 and 2017, respectively, would be: A: 768, 0 B: 192, 576 C: 0, 768 D: 576, 192 (In dollars)
A: 768, 0 B: 192, 576 C: 0, 768 D: 576, 192 (In dollars)
Explanation / Answer
Amount of interest revenue Rosewood would report in 2016 = [$12800 * 6%/12 months] * 9 months = $576 Amount of interest revenue Rosewood would report in 2017 = [$12800 * 6%/12 months] * 3 months = $192 The answer is : $576 , $192
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