DeKalb Company made a loan of $6,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate o

Answer: For year 1, the recorded interest revenue is $270.

In year 2, the recorded interest revenue is $90

Explanation:

Firstly, it is essential to recognize that year 1 begins from April 1 up to December 31, accounting for a total of 9 months, whereas year 2 starts from January 1 of the subsequent year and continues until March 31, covering 3 months.

Using the simple interest equation:-

(P × R × T)/100

where P = Principal

R = Rate

T = Time in years.

Since year 1 encompasses a span of 9 months, it must be converted into years prior to resolving:

12 months translates to 1 year

9 months equates to? year

= 9/12 × 1

= 3/4 years

[[6000 × 6 × 3] / [100 × 4]]

= $270 recorded for year 1

In year 2, which is 3 months (January 1 - March 31)

To convert 3 months into years provides 1/4 years

[[6000 × 6 × 1] / [100 × 4]]

= $90 will be noted for year 2

Answer:In year 1, interest revenue is $270.

For year 2, the interest revenue amounts to $90

Explanation:It's crucial to understand that year 1 spans from April 1 to December 31, comprising 9 months, whereas year 2 runs from January 1 to March 31, totaling 3 months.

Utilizing the simple interest formula:-

(P × R × T)/100

With P as Principal

R as Rate T representing Time (in years)

Hence, since year 1 corresponds to 9 months, we need to adjust this to years before calculation:

12 months is 1 year

9 months equates to? year = 9/12 × 1

= 3/4 years