# Evaluating alternative notes A borrower has two alternatives for a loan: (1) issue a $360,000, 60-day, 5% note or (2) issue a$360,000, 60-day note that the creditor discounts at 5%. a. Calculate the amount of the interest expense for each option. b. Determine the proceeds received by the borrower in each situation. c. Which alternative is more favorable to the borrower? Explain.

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

#### Solutions

Chapter
Section
Chapter 11, Problem 4E
Textbook Problem

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