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aev [14]
3 years ago
7

In October​ 1, 2019,​ Westfield, Inc. sold machinery to a customer for $ 25 comma 000. The customer could not pay at the time of

​ sale, but agreed to pay 12 months​ later, and signed a 12minusmonth note at 11​% interest. How much interest revenue was earned during​ 2019? Round any intermediate calculations to two decimal​ places, and your final answer to the nearest dollar.
Business
1 answer:
Virty [35]3 years ago
3 0

Answer:

Interest revenue for the year 2019 = $688

Explanation:

Total cost of asset = $25,000

Interest Revenue to be earned = 11% for 12 months

Total interest revenue = $25,000 X 11% = $2750

In the year 2011 the asset is sold on 1 October therefore interest revenue for the year 2011 will be from 1 October to 31 December = 3 months = $2,750 X \frac{3}{12} = $687.50

Interest revenue for the year 2019 = $688

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