Question: In discounting an interest bearing note receivable why is the discount
In discounting an interest-bearing note receivable, why is the discount figured on the maturity value of the note?
Answer to relevant QuestionsExplain how to record a discounted note receivable.On May 10, Morris Company received a 90-day, 6.5 percent note for $ 7,500, dated May 10, for merchandise sold to Baar Company. Morris Company endorsed the note in favor of its bank on May 28. The bank discounted the note at ...Here are some of the transactions carried out by Geary Company this year. Jan. 7 Sold merchandise on account to Edge Imports; 2/10, n/30; $ 2,835. Feb. 6 Received a 30-day, 6 percent note, dated this day, for $ 2,835 from ...The terms discount and discounting are used repeatedly in accounting. For example, it is common to see references to “a sales discount of 2 percent,” “discounting our note at the bank,” “discounting a customer’s ...Norris Company uses the allowance method of estimating expenses from bad debts. Management analyzed its accounts receivable balances on December 31 and determined the following aged balances:Compute the estimate of the ...
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