INTERMEDIATE ACCT.CUSTOM W/CONNECT
10th Edition
ISBN: 9781307690804
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 13, Problem 13.5BE
Non-interest-bearing note; effective interest rate
• LO13–2
Life.com issued $10 million of commercial paper on April 1 on a nine-month note. Interest was discounted at issuance at a 6% discount rate. What is the effective interest rate on the commercial paper?
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Exercise 5-24 (Static) Solving for unknown interest rate; installment notes [LO5-9, LO5-10]
Big Warehouses borrowed $100,000 from a bank and signed a note requiring 20 annual payments of $13,388 beginning one year
from the date of the agreement.
Required:
Determine the interest rate implicit in this agreement.
Note: Use tables, Excel, or a financial calculator. Round percentage answer to one decimal place. (FV of $1. PV of $1. FVA of $1. PVA
of $1. FVAD of $1 and PVAD of $1)
Solve for i
Present value
Annuity payment
n=
(=
12
00:12:14
Life.com issued $20 million of commercial paper on April 1 on a nine-month note. Interest was discounted at issuance at a 11% discount
rate.
1. Calculate the discount on the commercial paper.
2. Calculate the effective interest rate on the commercial paper.
Complete this question by entering your answers in the tabs below.
Discount Effective Rate
Calculate the effective interest rate on the commercial paper.
Note: Do not round intermediate calculation. Enter your answers in whole dollars. Round "Effective Interest Rate" to 1 decimal place. (i.e.,
0.123 should be entered as 12.3).
Discount
Proceeds
=
$ 1,650,000 =
9-month rate
0%
%
11.2 Amount due at maturity: 2,900 Discount rate: 6 ¼ Time: 180 days
Maturity Value (MV) = 2900
Discount Rate (r)=6 1/4
Time (n) = 180 days
What is the Bank Discount and Proceeds
Chapter 13 Solutions
INTERMEDIATE ACCT.CUSTOM W/CONNECT
Ch. 13 - What are the essential characteristics of...Ch. 13 - Prob. 13.2QCh. 13 - Bronson Distributors owes a supplier 100,000 on...Ch. 13 - Bank loans often are arranged under existing lines...Ch. 13 - Prob. 13.5QCh. 13 - Prob. 13.6QCh. 13 - Salaries of 5,000 have been earned by employees by...Ch. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Long-term obligations usually are reclassified and...Ch. 13 - How do IFRS and U.S. GAAP differ with respect to...Ch. 13 - Prob. 13.15QCh. 13 - Prob. 13.16QCh. 13 - Prob. 13.17QCh. 13 - Prob. 13.18QCh. 13 - Suppose the analysis of a loss contingency...Ch. 13 - Prob. 13.20QCh. 13 - Distinguish between the accounting treatment of a...Ch. 13 - At December 31, the end of the reporting period,...Ch. 13 - After the end of the reporting period, a...Ch. 13 - Prob. 13.24QCh. 13 - Prob. 13.25QCh. 13 - Prob. 13.26QCh. 13 - Prob. 13.27QCh. 13 - Prob. 13.28QCh. 13 - Bank loan; accrued interest LO132 On October 1,...Ch. 13 - Non-interest-bearing note; accrued interest LO132...Ch. 13 - Determining accrued interest LO132 On July1,...Ch. 13 - Commercial paper LO132 Branch Corporation issued...Ch. 13 - Non-interest-bearing note; effective interest rate...Ch. 13 - Sales tax LO133 DuringDecember, Rainey Equipment...Ch. 13 - Prob. 13.12BECh. 13 - Prob. 13.13BECh. 13 - Contingency LO135, LO136 Skill Hardware is the...Ch. 13 - Contingency LO135, LO136 Bell International can...Ch. 13 - Prob. 13.16BECh. 13 - Prob. 13.17BECh. 13 - FASB codification research LO133, LO134, LO135...Ch. 13 - Current noncurrent classification of debt; Sprint...Ch. 13 - Prob. 13.12ECh. 13 - Prob. 13.14ECh. 13 - Extended warranties LO135, LO136 Carnes...Ch. 13 - Disclosures of liabilities Indicate (by letter)...Ch. 13 - Prob. 13.11PCh. 13 - Prob. 13.2DMPCh. 13 - Prob. 13.3DMPCh. 13 - Prob. 13.4DMPCh. 13 - Prob. 13.18DMPCh. 13 - Real World Case 1319 Contingencies LO135 Real...Ch. 13 - Prob. 1CCTCCh. 13 - Prob. 2CCTC
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