Sutton Trucking Made Two Equal Payments, on June 25 and July

question 19

Short Answer

Sutton Trucking made two equal payments, on June 25 and July 15, on an invoice for $6,350 dated June 15 with terms 3/10, 1/30, n/60. The payments reduced the balance owed on the invoice to $1,043.33. What was the amount of each payment?

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Definitions:

Marketable Securities

Financial instruments that are easily convertible to cash and are subject to minimal price risk.

Amortized Cost

The amount at which a financial asset or liability is measured at initial recognition minus principal repayments, plus or minus the cumulative amortization using the effective interest method.

Trading Securities

Financial instruments that are purchased and held primarily for selling them in the near term to generate income on short-term price differences.

Marketable Securities

Financial instruments that can be easily converted into cash, typically with high liquidity and short-term maturities.