On December 1, 2018, Restaurant Equipment, Inc. sold machinery to a customer for $23,000. The customer could not pay at the time of sale but agreed to pay 9 months later and signed a 9-month note at 11% interest. What was the total amount of cash collected by Restaurant Equipment on the maturity 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 for the note for 9 months at 11% is calculated as $23,000 x 11% x (9/12) = $2,145. 
Therefore, the total amount due at maturity is $23,000 + $2,145 = $25,145. 
Since the customer paid the entire amount at maturity, the total amount of cash collected by Restaurant Equipment is $25,145. 
Rounded to the nearest dollar, the answer is $24,898 (choice B).