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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Principal plus interest equals ______ of a note.

  1. (a) discount
  2. (b) net proceeds
  3. (c) interest rate
  4. (d) maturity value

To determine

Identify the option that equals principle plus interest equals of a note.

Explanation

Promissory note:

Promissory note is the written to make payment for a particular sum at a definite future date.

Justification for the incorrect options of (a), (b) and (c):

Discount, net proceeds and interest rate does not equal to the principal plus interest of the note. Therefore, these are incorrect options.

Justification for correct option (d):

The principle value of the note including the interest equals the “maturity value of the note”...

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