Correct answer Mason Corporation issued its own $15,000, 120-day, non-interest-bearing note to a bank. The only payment Masonwill ever make to the bank will be for $15,000 at the maturitydate of the loan, as the bank discounts the note at 8%. Theproceeds to Mason are:a. $15,000b. $13,600c. $14,600d. $15,200e. None of the above

To calculate the proceeds to Mason Corporation, we need to determine the amount the bank discounts…

Answered: Mason Corporation issued its own…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 19P

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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.

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