Use the following information to answer questions
On February 1, 2010, Kern Corporation bought $5,000 of paints and brushes from Mobile Incorporated. Credit terms were 3/10, net 45. On March 15, Kern was unable to pay its outstanding invoice and had Mobile Inc. transfer the outstanding balance to a 10%, 180-day note receivable. Interest is due on the note's maturity date.
-How much must Kern remit to Mobile on the maturity date (assuming a 360-day year)?

Question

Use the following information to answer questions 
On February 1, 2010, Kern Corporation bought $5,000 of paints and brushes from Mobile Incorporated. Credit terms were 3/10, net 45. On March 15, Kern was unable to pay its outstanding invoice and had Mobile Inc. transfer the outstanding balance to a 10%, 180-day note receivable. Interest is due on the note's maturity date.
-How much must Kern remit to Mobile on the maturity date (assuming a 360-day year)?

Quizplus · Accepted Answer

The principal amount is $5,000. The interest for 180 days at 10% per annum is calculated as follows: $5,000 * 10% * (180/360) = $250. Therefore, the total amount Kern must remit is $5,000 + $250 = $5,250.

Use the Following Information to Answer Questions