.00 Merge d Center .0 Format Painter Formatting Table Styles Clipboard Font Alignment Number Styles 117 fx H A B D E F You are interviewing for an internship at Credit Suisse. The bank requires all job applicants to take a competency test on basic money mathematics. Below is the interest calculations portion of the exam. You must correctly answer at least 3 cases to be eligible for a second-round interview. 1 (a) Assume the bank holds a 30-day 350,000 Indian Rupee (INR) note receivable dated June 5, 2020. The annual interest rate is stated at 5%. 2 3 What is the maturity date? (Points: 1) 4 What is the total maturity value of the note, including interest? (Points: 6) 5 6 7 8 9 10 (b) Assume the bank holds a INR 1,000,000 note receivable dated October 1, 2020. This note matures on September 30, 2021. This note is written to assume a 360 day year and 30 day months. The annual interest rate is stated at 8%. How much interest income should the bank record for its accounting year ending December 31, 2020? (Points:4) 11 12 13 (c) Assume the bank holds a INR 400,000 note receivable dated June 1, 2020. This note matures on August 31, 2020. This note is written to assume a 365 day year and actual days outstanding are used in all calculations. The annual interest rate is stated at 10%. Interest and principal are payable at lump sum at the maturity date. Adjusting entries for interest are only done at the end of the year. Record the journal entry if the borrower honors the note at maturity (Points: 8) 14 15 . B C D E F H J 9 10 (b) Assume the bank holds a INR 1,000,000 note receivable dated October 1, 2020. This note matures on September 30, 2021. This note is written to assume a 360 day year and 30 day months. The annual interest rate is stated at 8%. How much interest income should the bank record for its accounting year ending December 31, 2020? (Points:4) 11 12 13 (c) Assume the bank holds a INR 400,000 note receivable dated June 1, 2020. This note matures on August 31, 2020. This note is written to assume a 365 day year and actual days outstanding are used in all calculations. The annual interest rate is stated at 10%. Interest and principal are payable at lump sum at the maturity date. Adjusting entries for interest are only done at the end of the year. Record the journal entry if the borrower honors the note at maturity (Points: 8) Account Debit Credit 14 15 16 17 18 19 20 21 22 23 (d) Would your journal entry in (c ) above change if the borrower does not honor the note at maturity. If so, how? (Points: 4) Account Debit Credit 24 25 26 27 28 29 30 Total Points Question 1 Question 2 Question 3 Question 4
