On December 1, 2015, Parsons Inc. sold machinery to a customer for $20,000. The customer could not pay at the time of sale, but agreed to pay 9 months later, and signed a 9-month note at 9% interest. What was the total amount of cash collected by Parsons on the maturity of the note?

Question

Quizplus · Accepted Answer

The total amount collected includes the principal and interest. The interest is calculated as $20,000 * 9% * (9/12) = $1,350. Therefore, the total amount collected is $20,000 + $1,350 = $21,350.