On December 1, 2020, Eagle, Inc. sold machinery to a customer for $23,000. The customer could not pay at the time of sale but agreed to pay 3 months later and signed a 3-month note at 11% interest. How much interest revenue was earned for the entire term of the note? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The interest revenue is calculated as follows:Interest = Principal x Rate x TimeInterest = $23,000 x 11% x 3/12Interest = $23,000 x 0.11 x 0.25Interest = $632.50 (rounded to the nearest dollar)