On January 1, Harrison Enterprises borrowed $ 40,000 for three years. Harrison signed a noninterest-bearing note. Assuming that the market rate of interest is 9 percent on the date the note is made and that interest is compounded annually, what is the face value of the note? What is the amount of interest expense shown on the budgeted income statement for the first two years? Describe the cash inflows and outflows Harrison must plan for with this note.
Answer to relevant QuestionsFouch Corporation wants to borrow $ 80,000 and use a noninterest- bearing note with a five- year life. If the market interest rate is 8 percent and the interest is compounded semiannually, what is the face value of the note? ...Determine the cash received from a $ 1,000,000 bond issue if the bonds were issued at each of the following prices: A. 93 7/8 B. 97 3/4 C. 102 3/8 D. 105 1/4 Clifton, Inc., needs to borrow some money. It prepares a eight- year periodic and lump- sum payment note with a face value of $ 200,000 and a face rate of interest of 7 percent paid semiannually. If the market rate of ...Mutchler Corporation plans a $ 12,000,000 bond issue that has a carrying value of $ 11,232,125 as of September 1, 2011. For each of the following assumptions, describe cash flows that occur and the impact each scenario would ...Hannan Company needs to borrow $ 15,000,000 to finance an addition to its manufacturing facilities. It has obtained an installment note at 8 percent interest for 15 years. Payments will be made monthly be-ginning one month ...
Post your question