In arranging for a 90-day loan from a bank, Mandy Company has the option of (1) Giving

Question:

In arranging for a 90-day loan from a bank, Mandy Company has the option of
(1) Giving a $ 50,000, 6 percent interest- bearing note, dated November 3, that will be accepted at
(2) Giving a $ 50,000 note that will be discounted at 6 percent.
a. What is the amount of interest in each case?
b. What is the amount of cash Mandy Company actually receives in each case?

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...