Answer
For the interest revenue for 2012 (interest-bearing note receivable), should be determined by multiplying the face/principal amount of the note by the note’s rate of interest by one half (July 1, 2012 to December 31, 2012).
Work Step by Step
Interest accrues with the passage of time, and it should be accounted for as an element of revenue over the life of the note receivable.
