On June 1, Davis Inc. issued an $89,300, 8%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using a 360-day year, what isthe amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar.a. $1,806Ob. $7,144O c. $595Od. $1,191B

Answer : Interest revenue recognized in the following year = $89,300 * 8% * 91/360 Interest revenue…

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Business

Accounting

Inc. issued ar а Cerest revenu

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

On June 1, Davis Inc. issued an $89,300, 8%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using a 360-day year, what is
the amount of interest revenue recognized by Garcia in the following year? When required, round your answer to the nearest dollar.
a. $1,806
Ob. $7,144
O c. $595
Od. $1,191
B

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