On January 26, McMaster Co. borrowed cash from Quantum Bank by issuing a 45-day note with a face amount of $324,000. Assume a 360-day year. Required: a. Determine the proceeds of the note, assuming that the note carries an interest rate of 10%. $ b. Determine the proceeds of the note, assuming that the note is discounted at 10%. $
On January 26, McMaster Co. borrowed cash from Quantum Bank by issuing a 45-day note with a face amount of $324,000. Assume a 360-day year. Required: a. Determine the proceeds of the note, assuming that the note carries an interest rate of 10%. $ b. Determine the proceeds of the note, assuming that the note is discounted at 10%. $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Proceeds from Notes Payable
On January 26, McMaster Co. borrowed cash from Quantum Bank by issuing a 45-day note with a face amount of $324,000. Assume a 360-day year.
Required:
a. Determine the proceeds of the note, assuming that the note carries an interest rate of 10%.
$
b. Determine the proceeds of the note, assuming that the note is discounted at 10%.
$
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