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5 October, 09:41

On October 1, 2021, Oberley Corporation loans one of its employees $25,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022.

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  1. 5 October, 09:47
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    The correct answer is $500, and $1,500.

    Explanation:

    According to the scenario, the given data are as follows:

    Amount = $25,000

    Time period in 2021 = 3 months

    Time period in 2022 = 9 months

    rate of interest = 8%

    So, we can calculate the interest revenue by using following formula:

    Interest revenue for 2021 = ($25,000 * 8%) * 3: 12

    = $500

    Interest revenue for 2022 = ($25,000 * 8%) * 9: 12

    = $1,500
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