How much interest revenue will the company record

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Question - Time period is important in accounting. Companies need to report revenue and expenses on their income statement based on what they earned and incurred during the accounting period.

Assume the company had invested $100,000 in an interest-bearing investment on September 1st of this year.  The investment earns 6% interest, but the interest doesn't get paid out until the end of the first six months.  What, if any, interest revenue should the company record on their December 31st year ending income statement of this year?  

When the interest is paid in six months (end of February of the second year); how much interest revenue will the company record when they collect the cash at the end of February?

Reference no: EM132683007

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