On 1 December 2014, Parsons Sales sold machinery to a customer for $2 000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9- month bill at 12% interest. How much interest revenue was earned during the year 2014?

Question

Quizplus · Accepted Answer

Interest revenue for 2014 is calculated for one month (December) since the sale occurred on December 1, 2014. The interest for one month is $2,000 * 12% * (1/12) = $20.

On 1 December 2014, Parsons Sales Sold Machinery to a Customer