Answered: 14. Barbara Waters signed a simple…

14. Barbara Waters signed a simple discount note for S15,000 for 120 days at a rate of 9%. Find (a) the proceeds and (b) the effective interest rate based on the proceeds received by Waters. [9.3]

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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14. Barbara Waters signed a simple discount note for S15,000 for 120 days at a rate of 9%.
Find (a) the proceeds and (b) the effective interest rate based on the proceeds received
by Waters. [9.3]

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