On December 16, 2020, the ACE Corporation purchases $15,000 of equipment by issuing a 30-day, 12% note payable. The total amount of interest due on the note is:

Question

Quizplus · Accepted Answer

To find the total amount of interest due on the note, we can use the following formula:

Interest = Principal x Rate x Time

Where:
- Principal = $15,000
- Rate = 12% per year (or 0.12 as a decimal)
- Time = 30 days ÷ 365 days (assuming a 365-day year)

Time = 0.08219

So, the interest due on the note is:

Interest = $15,000 x 0.12 x 0.08219
Interest = $147.95

Therefore, the best choice is C.

On December 16, 2020, the ACE Corporation Purchases $15,000 of Equipment