Respuesta :
The financial records of Adams corporation for year 3 is 11.61 times
What is interest earned?
Interest generated is the total amount of interest from investments that send their owner a set schedule of required payments on a regular basis. A certificate of deposit or an interest-bearing bank account, for instance, are two ways to earn interest from money placed in them.
Lending money to other organizations earns interest income. The phrase is typically used in a company's income statement to list the interest received on money held in savings accounts, certificates of deposits, or other investments. For the use of their money, lenders may earn interest, and borrowers may pay interest.
Given:
The times interest earned ratio is
= (Net income + Income tax expense + Interest expense) ÷ Interest expense
= ($25,000 + $27,000 + $4,900) ÷ $4,900
= 11.61 times
Hence, the times was interest earned in Year 3 is 11.61 times
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