Wyatt Corporation, an 80 owned subsidiary, accepted a $60,000, 12 , 90 day note from a customer for services performed On that same date, because Wyatt Corporation was in need of cash for operations, the subsidiary endorsed the note over to its parent company in exchange for $60,000 After holding t...

Part A Face Par value of note 60000 Interest 60000 x ...

Wyatt Corporation, an 80%-owned subsidiary, accepted a $60,000, 12%, 90-day note from a customer for services performed.

Question:

Wyatt an 80%-owned subsidiary, accepted a $60,000, 12%, 90-day note from a customer for services performed. On that same date, because Wyatt was in need of cash for operations, the subsidiary endorsed the note over to its parent company in exchange for $60,000. After holding the note for 30 days, the parent discounted the note with an independent bank. The was 13%. Both companies record discounted notes in a Discounted Notes Receivable account.

Required:
A. Compute the proceeds received by the parent company from discounting the note.
B. Prepare the workpaper entry, if any, needed to eliminate the note. If none is needed, explain why.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...