Solve this accounting problem Malloy Company issued its own $10,000, 90-day, non-interest-bearing note to a bank. The only payment Malloy will ever maketo the bank will be for $10,000 at the maturity date of the loanas the bank discounts the note at 10%. The proceeds to Malloyarea. $10,000b. $9,000c. $9,750d. $10,250e. None of the above

Step 1:- Introduction to the Discounting Own NotesA company can discount their notes by giving the…

Answered: Malloy Company issued its own $10,000,…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 23MC: Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It...

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Cullumber Inc. assigns $4728000 of its accounts receivables as collateral for a $3.30 million loan with a bank. The bank assesses a 3% finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction? O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Accounts Receivable for $3300000 O Debit Cash for $3003000, debit Interest Expense for $297000, and credit Notes Payable for $3300000 O Debit Cash for $1890800, debit Interest Expense for $99000, debit Due from Bank for $1428000, and credit Accounts Receivable for $4728000 O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Notes Payable for $3300000
Foremost Company received from a customer a one-year, P500,000 note bearing annual interest of 8%. After holding the note for six months, the entity discounted the note at the bank at an effective interest rate of 10%. 1. What amount of cash was received from the bank? a. 540,000 b. 523,810 c. 513,000 d. 459,238 2. What is the loss on note receivable discounting? a. 20,000 b. 13,000 c. 7,000 d. 0
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On January 1, 2023, Karen Hong lent $64612 to Ben Bachu. A zero-interest-bearing note (face amount, $86000) was exchanged solely for cash; no other rights or privileges were exchanged. The note is to be repaid on December 31, 2025. The market rate of interest for a loan of this type is 10%. To the nearest dollar, and using the effective interest method, how much interest revenue should Ms. Hong recognize in 2023? $19383 $6461 $25800 ○ $8600
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Bencorp issues a $90,000, 6-month, noninterest-bearing note that the bank discounted at a 10% discount rate. Required: 1. Prepare the appropriate journal entry to record the issuance of the note. 2. Determine the effective interest rate. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record the issuance of the note. (If no entry is required for a tr journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 Record the issuance of $90,000, 6-month, non-interest-bearing note issued at a 10% discount rate. Note: Enter debits before credits.
Brooke Company discounted its own P5, 000,000 one year note at a bank, at a discount rate of 12%, when the prime rate was 10%. In reporting the note in Brooke’s statement of Financial position prior to maturity, what rate should Brooke use for the recording of Interest expense?
On January 1, 2024, Sandra Clark loaned $207976 to George Lewis. A zero-interest-bearing note (face amount, $262000) was exchanged solely for cash: no other rights or privileges were exchanged. The note is to be repaid on December 31, 2026. The prevailing rate of interest for a loan of this type is 8%. The present value of $262000 at 8% for three years is $207984. What amount of interest income should Ms. Clark recognize in 2024? O $46332 O $20960 $16638 O $62830
Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.
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On October 18, Blue Ridge Corporation accepted a $300,000 non-interest-bearing note from Long Corporation. What is the maturity value of the note? Use ordinary interest. Maturity Value
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