The following interest-bearing promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.) MaturityDate ofNoteMaturityDateFaceInterestTerm ofValueValueRate (%)Note (days)(in $)$1,2807.9Sept. 13130Select- vDiscountProceedsDate ofDiscountDiscountPeriod (days)Rate (%)(in $)Dec. 611.3

Maturity Value (in $) Date of Maturity Face Value Term of Note (days) Interest Rate (%) Note Date $1,280 Sept. 13 130 Selectv 7.9 Discount Proceeds Date of Discount Discount Period (days) (in $) Rate (%) Dec. 6 11.3

Maturity Value (in $) Date of Maturity Face Value Term of Note (days) Interest Rate (%) Note Date $1,280 Sept. 13 130 Selectv 7.9 Discount Proceeds Date of Discount Discount Period (days) (in $) Rate (%) Dec. 6 11.3

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

100%

The following interest-bearing promissory note was discounted at a bank by the payee before maturity. Use the ordinary interest method, 360 days, to calculate the missing information. (Round dollars to the nearest cent.)

Maturity
Date of
Note
Maturity
Date
Face
Interest
Term of
Value
Value
Rate (%)
Note (days)
(in $)
$1,280
7.9
Sept. 13
130
Select- v
Discount
Proceeds
Date of
Discount
Discount
Period (days)
Rate (%)
(in $)
Dec. 6
11.3

Expert Solution

Step 1

Given:

Face value = $1280

Days of note = 130

Interest rate = 7.9%

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