LISA Corp. received from MIK Corp. a one-year, $375,000 note bearing annual interest of 8%. After holding the note for six months, LISA Corp. discounted the note at PNB at an effective interest rate of 10%. How much is the net cash proceeds from discounting the note? a. $375,000 b. $364,500 c. $384,750 d. $405,000
LISA Corp. received from MIK Corp. a one-year, $375,000 note bearing annual interest of 8%. After holding the note for six months, LISA Corp. discounted the note at PNB at an effective interest rate of 10%. How much is the net cash proceeds from discounting the note? a. $375,000 b. $364,500 c. $384,750 d. $405,000
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
ChapterD: Notes Payable And Notes Receivable
Section: Chapter Questions
Problem 2P
Related questions
Question
LISA Corp. received from MIK Corp. a one-year, $375,000 note bearing annual interest of 8%. After holding the note for six months, LISA Corp. discounted the note at PNB at an effective interest rate of 10%.
How much is the net cash proceeds from discounting the note?
a. $375,000
b. $364,500
c. $384,750
d. $405,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT