On July 1, 2020 Trolley & Train World borrowed money from First Friendly National Bank by issuing a $25,000, 90 day, non-interest bearing note. The note was discounted to 14%. Required: Compute the following: Use 360-days in a year. How much money did Trolley and Train World receive? $ What was the total amount of interest paid? $ What is the effective 90 day interest rate on this note? Round percentage to two decimals. % What is the approximate annual effective interest rate on this note payable? Round your intermediate calculation to four decimal places and your final answer to two decimal places.
On July 1, 2020 Trolley & Train World borrowed money from First Friendly National Bank by issuing a $25,000, 90 day, non-interest bearing note. The note was discounted to 14%. Required: Compute the following: Use 360-days in a year. How much money did Trolley and Train World receive? $ What was the total amount of interest paid? $ What is the effective 90 day interest rate on this note? Round percentage to two decimals. % What is the approximate annual effective interest rate on this note payable? Round your intermediate calculation to four decimal places and your final answer to two decimal places.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On July 1, 2020 Trolley & Train World borrowed money from First Friendly National Bank by issuing a $25,000, 90 day, non-interest bearing note. The note was discounted to 14%.
Required:
Compute the following: Use 360-days in a year.
- How much money did Trolley and Train World receive?
$
- What was the total amount of interest paid?
$
- What is the effective 90 day interest rate on this note? Round percentage to two decimals.
%
- What is the approximate annual effective interest rate on this note payable? Round your intermediate calculation to four decimal places and your final answer to two decimal places.
%
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education