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.

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