On December 16,2016,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 calculate the interest due on the note payable, we need to use the formula:

Interest = Principal x Rate x Time

Where: 
- Principal = $15,000 
- Rate = 12% per year (or 0.12/12 = 0.01 per month) 
- Time = 30 days/365 days (or 1/12 of a year)

Plugging in these values, we get:

Interest = $15,000 x 0.01 x 1/12 = $125

Therefore, the total amount of interest due on the note payable is $125. Option B is the closest to this value, so it's the correct answer.

On December 16,2016,the ACE Corporation Purchases $15,000 of Equipment by Issuing