A borrower has two alternatives for a loan: (1) Issue a $90,000, 90-day, 6% note (2) Issue
Question:
(1) Issue a $90,000, 90-day, 6% note
(2) Issue a $90,000, 90-day note that the creditor discounts at 6%.
a. Calculate the amount of the interest expense for each option.
b. Determine the proceeds received by the borrower in each situation.
c. Which alternative is more favorable to the borrower? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 47% (19 reviews)
a 90000 6 90360 1350 for each alternative b 1 90000 simpleinteres...View the full answer
Answered By
Muhammad Ghyas Asif
It is my obligation to present efficient services to my clients by providing a work of quality, unique, competent and relevant. I hope you have confidence in me and assign me the order and i promise to follow all the instructions and keep time.
4.60+
109+ Reviews
203+ Question Solved
Related Book For
Accounting
ISBN: 978-0324188004
21st Edition
Authors: Carl s. warren, James m. reeve, Philip e. fess
Question Posted:
Students also viewed these Accounting questions
-
A borrower has two alternatives for a loan: (1) Issue a $180,000, 45-day, 10% note or (2) Issue a $180,000, 45-day note that the creditor discounts at 10%. a. Calculate the amount of the interest...
-
A borrower has two alternatives for a loan: (1) Issue a $240,000, 60-day, 8% note or (2) Issue a $240,000, 60-day note that the creditor discounts at 8%. (a) Calculate the amount of the interest...
-
A borrower has two alternatives for a loan: (1) Issue a $120,000, 90-day, 6% note or (2) Issue a $120,000, 90-day note that the creditor discounts at 6%. a. Calculate the amount of the interest...
-
You want to conduct a study on commuters in NYC and how muchtime they spend traveling to and from work every day. You decide towait outside the subway stations from Monday to Friday, 9am to 5pm,and...
-
Let A he an n x n matrix with positive real cigenvalucs λ1 > λ2 >...... >λn. Let xi he an eigenvector belonging to λi, for each i, and let x = a1x1...
-
Would you expect economists to disagree less about public policy as time goes on? Why or why not? Can their differences be completely eliminated? Why or why not?
-
Let the field emitted by a multimode laser oscillating in \(N\) equals strength and independent modes be represented by \[ \mathbf{u}(t)=\sum_{n=1}^{N} \exp \left[-j\left(2 \pi v_{n} t-\theta_{k}(t)...
-
On April 1, 2011, Baxter Corporation purchased 80% of the outstanding stock of Crayon Company for $425,000. A condensed balance sheet of Crayon Company at the purchase date is shown below All book...
-
Punishments typically identified as intermediate sanctions include intensive supervision probation (ISP), drug courts, fines, community service, day reporting centers, remote-location monitoring,...
-
Describe how the objectives of marketing, production, and finance are in conflict over customer service, disruption to production, and inventories.
-
Builder's Supply issues a 90-day note for $200,000 to Gem Lighting Co. for merchandise inventory. Gem Lighting Co. discounts the note at 8%. a. Journalize Builder's Supply's entries to record: 1. The...
-
A business issued a 60-day, 5% note for $9,000 to a creditor on account. Journalize the entries to record (a) The issuance of the note (b) The payment of the note at maturity, including interest.
-
What are some of the specific steps that can be taken in an entrepreneurial venture for the purpose of building a strong ethical culture?
-
KLM Company issued $ 3 million of 9 . 7 5 % $ 8 0 par preferred shares in 2 0 0 1 . Calculate the total amount of dividends paid on this issue per year and the annual amount of the dividends per...
-
The task for this question is to write and test a function that converts a distance in miles to a distance in kilometres. The relationship between the two values is given by: Dkm = 1.60934 Dm where...
-
As a 1st-year accounting student, you have been introduced to various costing methods used by companies to allocate expenses and analyze their cost structures. One of these methods is Activity-Based...
-
How to calculate .539 grams/cm^3 into density (kg/m^3)?
-
The adjusted trial balance for Happ Company follows. Adjusted Trial Balance December 31 Number 101 Account Title Cash 106 Accounts receivable 153 Trucks 154 183 Land 201 209 233 307 Common stock 318...
-
Compute the reactions and bar forces in all members for the truss in Figure P9.24 if a downward load of 120 kips is applied at joint \(E\). The area of all bars is 5 in. \(^{2}\) and \(E=30,000\)...
-
Data on weekday exercise time for 20 females, consistent with summary quantities given in the paper An Ecological Momentary Assessment of the Physical Activity and Sedentary Behaviour Patterns of...
-
How would you illustratewith a picturethe overlap between and among the various communication traditions?
-
Ten interrelated elements that are most directly related to measuring the performance and financial status of an enterprise are provided below. Identify the element or elements associated with the 12...
-
Ten interrelated elements that are most directly related to measuring the performance and financial status of an enterprise are provided below. Identify the element or elements associated with the 12...
-
Ten interrelated elements that are most directly related to measuring the performance and financial status of an enterprise are provided below. Identify the element or elements associated with the 12...
-
What extent does emotional intelligence among leaders and employees contribute to effective teamwork and conflict resolution, and what methods can be employed to enhance emotional intelligence within...
-
Determine the exponential function y = c(b) that goes through the points (-2, 16) and (1,54). Algebraic work must be shown for full credit.
-
Solve 6. 8. 8 So log x (1 + x)(4+ x) [log x] 2 dx 0 1 + x So dx
Study smarter with the SolutionInn App