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Rosewood Company made a loan of $12,200 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. The amount of interest revenue that Rosewood would report during the years ending December 31, Year 1 and Year 2, respectively, would be:

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Answer:For Year 1 = $549 ,  For  year 2=$183

Explanation:

Interest  = Principal x Rate x Time ( Period)

For Year 1

Interest  = P x R x T

= $12,200 x 6% x 9 / 12  ( Period from April to December

= $549

For  year 2

 Interest   = P x R x T

= $12,200 x 6% x 3 / 12 ( Period from Jan of year 2 to April 1 st of year 2 since Ist year has been covered)

=$183

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