Vivo Coreceived an 8-Month,9% Note for $100,000 from Its Agent on on October

question 182

Short Answer

Vivo Co.received an 8-month,9% note for $100,000 from its agent on October 1,2016.The note is due on May 30,2017.If Vivo accounting period ends on December 31,2016,how much interest revenue should Vivo recognize during 2016 and 2017?
$\begin{array}{cc}&&&\underline { 2016 }&&& \underline { 2017 } \\\end{array}$

a.
$\begin{array}{cc}&&&\$3,750&&\$2,250\end{array}$

b.
$\begin{array}{cc}&&&\$2,250&&\$3,750\end{array}$

c.
$\begin{array}{cc}&&&\$9,000&&&\$0\end{array}$

d.
$\begin{array}{cc} &&&\$3,375&&\$5,625\end{array}$

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Definitions:

Doubled

A term indicating that a quantity, value, or size has increased by 100 percent, resulting in its multiplication by two.

Stayed The Same

A condition where no change or variation has occurred over a specified period.

Quantity Theory

An economic theory that proposes a direct relationship between the quantity of money in an economy and the level of prices of goods and services.

Doubled

Refers to an increase by 100% or a situation where a quantity has become twice as large.