Delta Company was accruing interest on a note receivable at the end of 2012.The note had principal of $10,000,an interest rate of 8%,and it had been outstanding for three months.Delta should accrue $200 of interest income for 2012.

Question

Quizplus · Accepted Answer

To calculate the interest income accrued in 2012, we need to multiply the principal amount ($10,000) by the interest rate (8%) and by the time period (3/12, since it has been outstanding for three months out of the 12-month calendar year).

$10,000 x 8% x 3/12 = $200

Therefore, Delta should accrue $200 of interest income for 2012.

Delta Company Was Accruing Interest on a Note Receivable at the End