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Question
On June 1, Davis Inc. issued an $84,000, 5%, 120-day note payable to Garcia Company. Assume that the fiscal year of Garcia ends June 30. Using the 360-day year, what is the amount of interest revenue recognized by Garcia in the following year, rounded to the nearest dollar?
a. $700
b. $1,600
c. $1,062
d. $4,200
Answer
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