On july 1, 2017 LA company sold equipment to NA company for 1,000,000. LA accepted a 10% note receivable for the entire sales price. This note payable in two equal installments of 500,000 plus accrued interest on December 31,2017 and December 31,2018. On July 1, 2018, LA discounted the note at a bank at an interest rate of 12%. What is the amount received by LA Company from the discounting of note receivable?
On july 1, 2017 LA company sold equipment to NA company for 1,000,000. LA accepted a 10% note receivable for the entire sales price. This note payable in two equal installments of 500,000 plus accrued interest on December 31,2017 and December 31,2018. On July 1, 2018, LA discounted the note at a bank at an interest rate of 12%. What is the amount received by LA Company from the discounting of note receivable?
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.6AP
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On july 1, 2017 LA company sold equipment to NA company for 1,000,000. LA accepted a 10% note receivable for the entire sales price. This note payable in two equal installments of 500,000 plus accrued interest on December 31,2017 and December 31,2018.
On July 1, 2018, LA discounted the note at a bank at an interest rate of 12%. What is the amount received by LA Company from the discounting of note receivable?
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