On October 1, 2021, Oberley Corporation loans one of its employees $25,000 and accepts a 12-month, 8% note receivable.Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022.**Table: Interest Revenue Calculation**| Year | Interest Revenue ||------|------------------|| 2021 | || 2022 | |**Analysis:**To calculate the interest revenue:1. **Interest Rate Formula:** - Annual Interest = Principal x Rate - For $25,000 at 8%, Annual Interest = $25,000 x 0.08 = $2,0002. **Interest Revenue for 2021:** - From October 1 to December 31 is 3 months. - Interest for 3 months = $2,000 x (3/12) = $5003. **Interest Revenue for 2022:** - The remaining 9 months in 2022. - Interest for 9 months = $2,000 x (9/12) = $1,500Therefore, the interest revenue recognized will be $500 for 2021 and $1,500 for 2022.

Given: Note receivable = $25,000 Due period = 12 month Interest rate = 8%Year Interest revenue Working note: 2021 $ 500 (25,000 x 8% x 3/12) 2022 $ 1,500 (25,000 x 8% x 9/12)

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On October 1, 2021, Oberley Corporation loans one of its employees $25,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022. Interest Year Revenue 2021 2022

On October 1, 2021, Oberley Corporation loans one of its employees $25,000 and accepts a 12-month, 8% note receivable. Calculate the amount of interest revenue Oberley will recognize in 2021 and 2022. Interest Year Revenue 2021 2022

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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