A company's holds a $1,000, two-month, 12% promissory note dated May 1. Which one of the following statements is true? A. The maturity value of the note is $1,000 B. The 12% interest rate on the note represents two-month interest rate and not an annual interest rate. C. The interest income is $20 D. The interest income is $120.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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A company's holds a $1,000, two-month, 12% promissory note dated May 1. Which one of the following statements is
true? A. The maturity value of the note is $1,000 B. The 12% interest rate on the note represents two-month interest
rate and not an annual interest rate. C. The interest income is $20 D. The interest income is $120.
Transcribed Image Text:A company's holds a $1,000, two-month, 12% promissory note dated May 1. Which one of the following statements is true? A. The maturity value of the note is $1,000 B. The 12% interest rate on the note represents two-month interest rate and not an annual interest rate. C. The interest income is $20 D. The interest income is $120.
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