On June 1, Year 1, Yola Corp. lent Dale $500,000 on a 12% note, payable in five annual installments of $100,000 beginning January 2, Year 2. In connection with this loan, Dale was required to deposit $5,000 in a noninterest-bearing escrow account. The amount held in escrow is to be returned to Dale after all principal and interest payments have been made. Interest on the note is payable on the first day of each month beginning July 1, Year 1. Dale made timely payments through November 1, Year 1. On January 2, Year 2, Yola received payment of the first principal installment plus all interest due. At December 31, Year 1, Yola’s interest receivable on the loan to Dale is .

The question is missing the below options:

A. $0

B. $5,000

C. $10,000

D. $15,000

The correct option is C,$10,000

Explanation:

As at 1st November year one, Dale has made payments in respect of interest on the loan of $500,000 to date, that is Dale has paid interest on the loan from inception-June 1 Year till 31st October Year 1.

As a result , the interest outstanding at the end of Year 1, is loan interest for November and December Year 1,which is computed below:

Outstanding loan interest=2/12*12%*$500,000

                                           =$10,000

From Dale's perspective $10,000 interest on loan is outstanding as the end of Year 1 while the same amount is the loan interest receivable by Yale Corp.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: