Connect Comnect IB unread)-andi . D The Average Mki. Order Detail-HB (8umead-and

Question

Connect Comnect IB unread)-andi . D The Average Mki. Order Detail-HB (8umead-andi View Message- x × × × x nnect Test 2 i Help Save & Exit Submit Frankenstein Enterprises received two notes from customers for sales that Frankenstein made in 2018. The notes included: Note A: Dated 5/31/2018, principal of $134,000 and interest due 3/31/2019 Note B: Dated 7/1/2018, principal of $226,000 and interest at 9% annually, due on 4/1/2019. Frankenstein had accrued a total of $16,200 interest receivable from these notes in its 12/31/2018 balance sheet 01:065The annual Interest rate on Note A is closest to: Multiple Choice 8.31% 9.00% 8.01% 771% Pre7 of 22 Next> 0 Type here to search 623 PM 12/12/2017 3

Explanation / Answer

Calculate annual interest rate :

Total interest = 16200

Notes 2 interest receivable on 12/31/2008 = 226000*9%*6/12 = 10170

Note 1 interest on 12/31/2008 = (16200-10170) = 6030

6030 Interest for 7 month

One year interest = 6030*12/7 = 10337

Principal amount = 134000

Interest rate = 10337*100/134000 = 7.71%

so answer is d) 7.71%

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