accrued interest revenue

dwatkins1025 · #1 Apr 16, 2007, 07:42 AM

home work question

comp holds a 90 day receivable of 10,000 from a customer. The note is dated oct 31 and has a 12% interest rate. your comp year ends on dec 31. how much interest revenue do you accrue on dec 31?

I said 10,000X.12= 1200*2/12=200 my answer is 200, am i correct

Superfly999 · Apr 16, 2007, 07:47 AM

Yes, I believe you are. The note was dated at the end of October and only 2 months passed in the question. The 12% is annual interest and only 2 months passed so only 2% interest is incurred. So your calculations are correct.



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