Can I please get detailed answer for this. I am trying to understand the process

Question

Can I please get detailed answer for this. I am trying to understand the process to get to the answer.

eep tal ice or trie note to cre maturity date. 17 Interest on notes receivable LO5 Consider the following independent scenarios a On 1 March this year, a company accepts a $10000, 5 per cent, 5 eight-month note receivable. On 1 September last year, a company accepts a $20000, 8 per cent, six-month note receivable. b c On 15 December last year, a company accepts a $15000, 10 per cent, four-month note receivable. Required Assuming a 30 June (this year) year-end, calculate current-year interest revenue for each scenario.

Explanation / Answer

Solution.

Year end on 30 june.

Scenario A.

Notes Amount 10,000

Rate of interest = 5%

Month in this year ( 1march to 30 june ) = 4 month.

Interest = (10,000 x 5%) x 4 / 12 = 166.67

Scenario B.

Notes Amount 20,000

Rate of interest = 8%

Month in this year ( 1 Sep to 28 Feb ) = 6 month.

Interest = (20,000 x 8%) x 6 / 12 = $800.

Scenario C.

Notes Amount 15,000

Rate of interest = 10%

Month in this year ( 1 Dec to 30 April ) = 4 month.

Interest = (15,000 x 10%) x 4 / 12 = $500.

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