On May 1, 201X, Jason Company received a $30,000, 90-day, 9% note from Quincy Company dated May

Question:

On May 1, 201X, Jason Company received a $30,000, 90-day, 9% note from Quincy Company dated May 1. On June 20, 201X, Jason discounted the note at Pittsfield Bank at a discount rate of 12%.

a. Calculate the following:

1. Maturity value of the note

2. Number of days the bank will hold the note until maturity date

3. Bank discount

4. Proceeds

b. Journalize the entry to record the proceeds.

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... 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...

Fantastic news! We've Found the answer you've been seeking!