A 180-day simple interest note was signed on March 15, 20xx with a face value of 65,000 at 8.25% per annum. The same was discounted at 11% in a bank on June 15,20xx, Find the discount amount and the proceeds.

A 180-day simple interest note was signed on March 15, 20xx with a face value of 65,000 at 8.25% per annum. The same was discounted at 11% in a bank on June 15,20xx, Find the discount amount and the proceeds.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 2CE

See similar textbooks

Related questions

Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…

A: The rate of interest required to have the desired amount can be calculated with the help of rate…

Q: During recessionary periods, bonds that were issued many years ago have a higher coupon rate than…

A: A Bond refers to an instrument that represents the loan being made by the investor to the company…

Q: Find the present value of a deferred annuity of P500 a year for 10 years that is deffered for 5…

A: The present value of deferred annuity can be calculated with the help of present value of annuity…

Q: An entrepreneur needs thousand of dollars to launch the global expansion of his software business. I…

A: Interest rate compounded continiously is 15% First Annual payments is of $20,000 after that reduced…

Q: Financial projections for a Start Up Company (baba nyonya restaurant). Thank you ;)

A: You'll need a few important papers to create financial projections for startups: a balance sheet, an…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: The aggregate amount of cash transaction that occurs at the starting of a new project is called…

Q: In relation to financial management, what have you learned so far?

A: Financial management is the practice of handling a company's finances in such a way it can be…

Q: $3000 are invested in a bank account at an interest rate of 5 percent per year. Find the amount in…

A: As per the answering guidelines we are allowed to solve the first three parts of a question. The…

Q: The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to…

A: Net present value is the difference between the present value of cash inflows and present value of…

Q: The firm's bank charges $18 per wire and $0.50 per EDT. The EDT takes one day longer to clear. The…

A: Since The minimum transfer balance= TBAL TBAL=Incremental costDS×(K-ECR(1-RRR))365 Where: DS= Days…

Q: Marginal Incorporated (MI) has determined that its after-tax cost of debt is 5.0% for the first $62…

A: Capital Budget = $167 million To be financed through: Debt = 167*325/500 = 108.55 million Preferred…

Q: Consider a non-paying dividend stock sells for $100. The continuously compounded risk-free interest…

A: Current Stock Price is $100 Exercise price at the end of 2 years is $88 To Find: Most profitable…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: NPV is the difference between the present value of cash inflows and initial investment NPV =PV of…

Q: TRUE OR FALSE Financial sector creates products for the management of risk, thus risk can be…

A: Risk management is the process of identifying, analyzing, and accepting or mitigating uncertainty in…

Q: risk" factor

A: Risk is a term that shows the possibility of injury or loss to the health, business, vehicle, etc.…

Q: 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Terminal cash flows the cash flows generated at the time of project get terminated or ended.…

Q: Market prices and credit spreads change much faster than credit ratings. Select one: True False

A: Credit ratings refer to quantified indicators of the credibility of borrowers. Higher the rating,…

Q: Explain what type of firms a Buyout Fund (or a Private Equity Fund) might target as part of a…

A: A leveraged buyout (LBO) is a type of business acquisition in which the vast majority of the cost of…

Q: In practice, a common way to value a share of a stock when a company pays dividends is to value the…

A: Stock price is defined as the maximum price that an investor is ready to pay for a stock. It is…

Q: Sam and Mary purchased a two-bedroom town house for $599 000 with a 10% down payment. The mortgage…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: F asked money amounting to P 9,000 from his parents on the first month 2020 and 12,000 on 2022. He…

A: Present value includes the money without the interest and future value includes the payment with…

Q: Q4. Describe the typical organization of a buyout fund.

A: A buyout is the acquisition of a controlling interest in a firm, and the terms are used…

Q: Lisa Loeb is considering buying 100 shares of CMA Record Company. The price of the shares is $52.…

A: An investor is not allowed to trade with securities exchanges directly as orders needs to be placed…

Q: Mannix Corporation stock currently sells for $100 per share. The market requires a return of 11…

A: P0 = D0(1 + g) / (R – g) D0 = P0(R – g) / (1 + g) D0 = Most recent dividend per share P0 = Stock…

Q: Please solve without using Excel and show work... An assembly machine to reduce labor costs $65,000…

A: The cost of operating equipment or machinery is known as operating cost. The operating cost is…

Q: Which of the following statements is false? A. Banks have high levels of liquidity assets and…

A: Duration of bond measures the sensitivity of prices of bonds with change in interest rate in the…

Q: Use the following information to answer this question. Windswept, Incorporated 2022 Income…

A: Quick ratio measures the short term liquidity of the firm. It can be calculated Quick ratio…

Q: Bryley, Inc. earned a net profit margin of 5.5 percent last year and had an equity multiplier of…

A: The return on equity can be calculated as per the Dupont equation

Q: Here and After Corporation plans a new issue of preferred stock. Similar risk stock currently offers…

A: Solution:- Preferred stock is the stock issued by the corporate which get preference over the common…

Q: Solved Manually. Taylor Swift, a college student of USeP decides to get a student loan amounting to…

A: Loan amount = $4000 Interest rate = 5% Monthly interest rate = 5%/12 = 0.416666666666667% Monthly…

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…

A: Given, Investment = $100 million plant and machinery = $80 million Net working capital = $20…

Q: The readings for module 3 explain that past performance for a company or stock is not a guarantee of…

A: The earnings of a company are most basic measure of a stock's worth. Since you're buying a portion…

Q: A guy deposited P4,000, P4,500 and P5,000 at the end of the 2nd year, 3rd year and 4th year,…

A: Year 2 deposit = P4000 Year 3 deposit = P4500 Year 4 deposit = P5000 Interest rate = 0.09

Q: 3. Consider three stocks A, B and C and a market index M with the following prices: Year то T1 T2…

A: Note: This question has several sub-parts. The first three have been answered below

Q: CCC Co issues a bond today that will pay a coupon of 8%, twice a year. The yield to maturity for…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Air handling equipment that costs P12, 000 has a life of eight years with a P2, 000 salvage value.…

A: Initial cost (C) = P 12000 Salvage value (S) = P 2000 n = 8 years r = 4.5%

Q: What equal uniform annual payment for 10 years beginning 1 year from now

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either…

Q: interest rate at 5%?

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: Bank A advertises a money market account that pays 3.5% compounded quarterly. Bank B advertises a…

A: Annual percentage of Yeild = [{(1+r)n} - 1] Where, r = Interest per period N = Number of periods…

Q: The B/C ratio of an investment of $10,000 that provides a benefit of $1,500 at the beginning every…

A: Benefit-cost ratio (BCR) refers to the ratio which shows the relationship between present value of…

Q: A Province of Manitoba $250,000 face value bond carrying a 2% coupon was issued on December 1, 2006,…

A: Here, Face value = $250,000 Coupon rate = 2% Time to maturity = 30 years Market yield (YTM) = 4.19%…

Q: 3. Replacing old equipment at an immediate cost of $120,000 and an additional outlay of $10,000 five…

A: NPV can be calculated by following function in excel =NPV(rate,value1,[value2],…) + Initial…

Q: Faisal has $14,000 in his savings account and can save an additional $4200 per year. If interest…

A: The time value of money concepts can be used to estimate the number of periods it will take to…

Q: You must evaluate a proposal to buy a new milling machine. The purchase price of the milling…

A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…

Q: A parcel of land can be leased for a period of 10 years. Initial development costs for clearing,…

A: The annual revenue grow by geometric sequence and present value of that can be found out from that…

Q: How much debt does the company now have, to the nearest thousand dollars? How much equity? What is…

A: Weighted average cost of capital (WACC) refers to the joint cost of company's capital from all the…

Q: Consider a project with free cash flows in one year of $148,100 or $180,200, with each outcome being…

A: Given, cashflows at weak economy is $148,100 Cash flow at strong economy is $180,200 Cost of…

Q: Yoko invested s4000 in a fund for 2 years and was paid simple interest. The total interest that she…

A: Investment (P) = $4000 Period (T) = 2 Years Interest amount (I) = $400

Q: An elective project is currently under review. It requires an initial investment of $116,000 for…

A: IRR is the Internal rate of return. It is that rate at which the NPV of a project is zero.

Q: Thank you for your answer, can you explain to me why n is negative in this formula?…

A: Here, The price of the bond is P. The periodic coupon payments are C. The rate of return is r. The…

Question

5. A 180-day simple interest note was signed on March 15, 20xx with a face value of 65,000 at 8.25% per annum. The same was discounted at 11% in a bank on June 15,20xx, Find the discount amount and the proceeds.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Information:

VIEW

Step 2: Caclulation:

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Jain Enterprises honors a short-term note payable. Principal on the note is $425,000, with an annual interest rate of 3.5%, due in 6 months. What journal entry is created when Jain honors the note?
Proceeds from notes payable On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of 150,000. A. Determine the proceeds of the note, assuming the note carries an interest rate of 10%. B. Determine the proceeds of the note, assuming the note is discounted at 10%.
On July 1, a company sells 8-year $250,000 bonds with a stated interest rate of 6%. If interest payments are paid annually, each interest payment will be ________. A. $120,000 B. $60,000 C. $7,500 D. $15,000
Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
On January 1 a company issues a $75,000 bond that pays interest semi-annually. The first interest payment of $1,875 is paid on July 1. What is the stated annual interest rate on the bond? A. 5.00% B. 2.50% C. 1.25% D. 10.00%
Campus Flights takes out a bank loan in the amount of $200,500 on March 1. The terms of the loan include a repayment of principal in ten equal installments, paid annually from March 1. The annual interest rate on the loan is 8%, recognized on December 31. (Round answers to the nearest whole dollar if needed.) A. Compute the interest recognized as of December 31 in year 1 rounded to the whole dollar. B. Compute the principal due in year 1.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
Gifts Galore Inc. borrowed 1.5 million from National City Bank. The loan was made at a simple annual interest rate of 9% a year for 3 months. A 20% compensating balance requirement raised the effective interest rate. a. The nominal annual rate on the loan was 11.25%. What is the true effective rate? b. What would be the effective cost of the loan if the note required discount interest? c. What would be the nominal annual interest rate on the loan if the bank did not require a compensating balance but required repayment in three equal monthly installments?