In order to preserve cash, Splish Inc. negotiated with one of its supplies for amount owing on account. $109, 087 was paid off by signing a zero interest note on June 1, 2023, due June 1, 2028, for $153, 000. What annual rate of interest is being paid by Splish?

In order to preserve cash, Splish Inc. negotiated with one of its supplies for amount owing on account. $109, 087 was paid off by signing a zero interest note on June 1, 2023, due June 1, 2028, for $153, 000. What annual rate of interest is being paid by Splish?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 26Q: A customer was unable to pay the accounts receivable on time in the amount of $34,000. The customer...

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Tagum Inc. required additional cash for its operation and used accounts receivable to raise such needed cash, as follows: On December 1, 2021 Tagum Inc. assigned on a non-notification basis accounts receivable of P 5,000,000 to a bank in consideration for a loan of 90% of the receivables less 5% service fee on the accounts assigned. Tagum Inc. signed a note for the bank loan. On December 31, 2021, Tagum Inc. collected assigned accounts of P3,000,000 less discount of P 200,000. Tagum Inc. remitted the collections to the bank in partial payment for the loan. The bank applied first the collection to the interest and the balance to the principal. The agreed interest is 1% per month on the loan balance. Tagum Inc. sold P 1,550,000 of accounts receivable for P 1,340,000 . The receivables had a carrying amount of P 1,470,000 and were sold outright on a nonrecourse basis. Tagum Inc. received an advance of P 300,000 from Union Bank by pledging P 360,000 of accounts receivable On June 30, 2021,…
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