Question

On October 1, 2016, Lees Electronic sold merchandise in exchange for a 4 month, $90,000 note receivable, with 9% interest. Interest revenue of $2,700 is earned in 2017. O True O False

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Answer #1

Interest Revenue = Principal * Rate * Time / 12 Months

Period in 2016 = October 1 ,2016 to December 31,2016

= 3 Months

Period in 2017 = 1 Month

Revenue earned in 2017 = $ 90,000 * 9% * 1/12

= $ 675

Hence the correct answer is False.

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