On August 1,2010,Ace Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $123,965.The note is due in 90 days and has an interest rate of 8%.What would be the total amount collected at the maturity date?
A)$123,965.00
B)$2,479.30
C)$126,444.30
D)$121,485.70
E)$133,882.20

Question

On August 1,2010,Ace Corporation accepted a note receivable in place of an outstanding accounts receivable in the amount of $123,965.The note is due in 90 days and has an interest rate of 8%.What would be the total amount collected at the maturity date? 
A)$123,965.00
B)$2,479.30
C)$126,444.30
D)$121,485.70
E)$133,882.20

Quizplus · Accepted Answer

To calculate the total amount collected at maturity, we need to add the interest earned on the note for 90 days.

Interest = Principal x Rate x Time 
Time = 90/365 = 0.2466 years

Interest = $123,965 x 0.08 x 0.2466 = $2,478.30

Total Amount Collected at Maturity = Principal + Interest 
= $123,965 + $2,478.30 
= $126,443.30

Therefore, the best choice is C.

On August 1,2010,Ace Corporation Accepted a Note Receivable in Place