Tri State Bank was the payee of a $60,000 note dated August 16. The note was made for 120 days and was discounted a 10%. On November 14, the note was rediscounted at New Hope Bank at 9%. a. How much did Tri State Bank loan to the maker of the note? b. How much had Tri State receive when it rediscounted the note? c. How much did Tri State make on the transaction? d. How much less interest was this than Tri State would have earned had it kept with note to maturity?
Tri State Bank was the payee of a $60,000 note dated August 16. The note was made for 120 days and was discounted a 10%. On November 14, the note was rediscounted at New Hope Bank at 9%. a. How much did Tri State Bank loan to the maker of the note? b. How much had Tri State receive when it rediscounted the note? c. How much did Tri State make on the transaction? d. How much less interest was this than Tri State would have earned had it kept with note to maturity?
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 16EA: Mystic Magic issued a $120,250 note on January 1, 2018 to a customer, Amy Arnold, in exchange for...
Related questions
Question
Tri State Bank was the payee of a $60,000 note dated August 16. The note was made for 120 days and was discounted a 10%. On November 14, the note was rediscounted at New Hope Bank at 9%.
a. How much did Tri State Bank loan to the maker of the note?
b. How much had Tri State receive when it rediscounted the note?
c. How much did Tri State make on the transaction?
d. How much less interest was this than Tri State would have earned had it kept with note to maturity?
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 4 steps
Recommended textbooks for you
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,
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
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,
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
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT