Question

On October​ 1, 2019, Fashion Jewelers accepted a 4minus​month, 14​% note for $ 8 comma 000 in settlement of an overdue account receivable. The accounting period ends on December 31. Calculate the accrued interest on the note at December​ 31, 2019.​ (Round any intermediate calculations to two decimal​ places, and your final answer to the nearest​ dollar.)

Answer 1

$280.00

Step-by-step explanation:

Data provided

Overdue accounts receivable = $8,000

Note percentage = 14%

The computation of accrued interest on the note is shown below:-

Accrued interest = Overdue accounts receivables × Note percentage × Remaining month (From Oct to Dec)

= $8,000 × 14% × 3 ÷ 12

= $8,000 × 14% × 0.25

= $280.00

therefore for computing the accrued interest we simply applied the above formula.