Answered: Investigate the face value of a…

Investigate the face value of a document for which $231,845.00 was received, it was discounted ten months before its maturity with a discount rate of 9% semiannual.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 24Q: Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms...

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

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Investigate the face value of a document for which $231,845.00 was received, it was discounted ten months before its maturity with a discount rate of 9% semiannual.

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A promissory note with a maturity value of $700 is sold at a discount rate of 8%, 45 days before maturity. Determine the discount and the proceeds.
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