Question 2 of 1o On June 1 2014 Siebens Enterprises loaned 3

Question 2 (of 1o) On June 1, 2014, Siebens Enterprises loaned $30,000 to Tyler Company for one year at 8 percent interest. Under the terms of the promissory no interest on May 31, 2015. Related to this note receivable. what amount of interest income would Siebens report on its 2014 income statement? (Round your final answer to O $2.400 $1,500 O $1.200 o $1.400 Type here to search

Solution

Correct answer is option d.1400

Interest income should be recognized on accrual basis.

Interest income to be reported in 2014 income statement would be,
=$30,000*8%*7/12
=2400*7/12
=$1400