One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $690 per month. You will charge 1.09 percent per month interest on the overdue balance. If the current balance is $14,910, how long will it take for the account to be paid off?

One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $690 per month. You will charge 1.09 percent per month interest on the overdue balance. If the current balance is $14,910, how long will it take for the account to be paid off?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 15MC: Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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If the current balance is $14,910, how long will it take for the account to be paid off?

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Step 1

Accounts payable means money taken by the company from material suppliers. Accounts payable is a form of liability because of that it's always shown in the current liability section in the balance sheet.

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