3nts) On April 1 each year, TAEL Co. receives interest on a $161,000, 6%, 6 year note receivable. OnDecember 31, 2020, the company recorded interest revenue of $7,245 on this note. Assuming TAEL Co.doesn't make reversing entries, how much interest revenue will they record on April 1, 2021? (AC 9 & 11)O $7,245O $9,660O $1,610O $2,415K

Answered: nts) On April 1 each year, TAEL Co.…

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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3
nts) On April 1 each year, TAEL Co. receives interest on a $161,000, 6%, 6 year note receivable. On
December 31, 2020, the company recorded interest revenue of $7,245 on this note. Assuming TAEL Co.
doesn't make reversing entries, how much interest revenue will they record on April 1, 2021? (AC 9 & 11)
O $7,245
O $9,660
O $1,610
O $2,415
K

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Step 1: Introduction:

Interest income is what a business receives from its investments or obligations. Due to the accrual method of accounting, it is included in the income statement when earned rather than when paid or received. Ordinary income is taxed on it. It's distinct from interest expenditure, which is what a business pays for the interest on the loans it takes out. It also differs from interest-only payments, which do not lower the debt's principle.

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