Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $480,000, 60-day, 8% note or (2) issue a $480,000, 60-day note that the creditor discounts at 8%. Assume a 360-day year. a. Calculate the amount of the interest expense for each option $ for each alternative. b. Determine the proceeds received by the borrower in each situation (1) $480,000, 60-day, 8% Interest-bearing nate (2) $480,000, 60-day note discounted at 8% 6. Alternative 1 is more favorable to the borrower because the borrower receives more cash A 360-day year is used when calculating interest on a note. Recall the definition of proceeds is the amount that the borrower receives in cash or merchandise. Consider amount of money available for use Entries for Notes Payable A business issued a 90-day, 15% note for $94,000 to a creditor on account. Journalize the entries to record (a) the issuance of the note and (b) the payment of the note at maturity, including interest. Assume a 360-day year. If an amount box does not require an entry, leave it blank. If required, round yours answers to whole dollar. Accounts Payable Notes Payable Notes Payable Interest Expense Cash Entries for Discounted Note Payable A business issued a 30-day note for $42,000 to a creditor on account. The note was discounted at 8%. Assume a 360-day year. a. Journalize the entry to record the issuance of the note. If an amount box does not require an entry, leave it blank. If necessary, round to one decimal place. Cash Interest Expense Notes Payable Chery W .. Why is the company issuing the note? What type of note is being issued interest-bearing or discounted)? How much will the company owe on the maturity date? b. Journalize the entry to record the payment of the note at maturity. If an amount box does not require an entry, leave it blank Notes Payable Cash &