Question

On February 1st, H&B Bank originated a loan for $50,000 at an interest rate of 7.2%. On March 15th, an interest payment of $300 was received. Which of the following best describes when interest revenue should be recognized?a. At a point in time (February 1stb. At a point in time (March 15th)c. At a point in time (March 31st)d. Over time

Answer 1

Answer:

d. Over time

Explanation:

The interest revenue will be recognize over time, regardless of the payment

If we only recognize revenue at payment due, if the bank client doesn't paid then we cannot recognize the accrued interest receivable.

We will recognize over time.