A company received the following notes during 2012. The notes were discounted on the dates and at

Question:

A company received the following notes during 2012. The notes were discounted on the dates and at the rates indicated:

Principal Amount Discount Rate Interest Rate Date Discounted Note Date Term Aug 15 Aug 30 Oct 15 13,000 10,000 4,000 120

Requirements
Identify each note by number, compute interest using a 360-day year, and round all interest amounts to the nearest dollar. Explanations are not required.
1. Determine the due date and maturity value of each note.
2. Determine the discount and proceeds from the sale (discounting) of each note.
3. Journalize the discounting of notes (1) and(2).

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...

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Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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Question Posted: Dec 16, 2011 08:49 AM

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A company received the following notes during 2012. The notes were discounted on the dates and at

Question:

Principal Amount Discount Rate Interest Rate Date Discounted Note Date Term Aug 15 Aug 30 Oct 15 13,000 10,000 4,000 120 days Jun 1 (1) Aug 19 (2) (3) 10% 13% 13% 90 days 6 months 11% 7% Jul 15

Step by Step Answer:

Req 1 Note Due Date Principal Interest Maturity Value ...View the full answer

Financial and Managerial Accounting

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