On August 1 2016 Deeva Inc sold equipment and accepted a six

On August 1, 2016, Deeva, Inc., sold equipment and accepted a six-month, 9%, $50,000 note receivable. Deeva\'s year-end is December 31, How much interest revenue should Deeva accrue on December 31, 2016? O A. $2,250 B. $1,875 O c. $4,500 O D. $2,425

Solution

Answer

Interest = Principle X Rate X Period

Here, Principle = $ 50,000

Rate = 9%

Period = 6 Months

Interest = $50,000 x 9% x 6/12

= $2,250

Interest Accrued from 1 August to 31 December = $2,250/6*5

= $1,875

Therefore Option B is correct.