Morneau Company borrowed $200,000 from Citibank at 8% interest. The loan agreement stated that a compensating balance
Question:
1. How much usable cash did Morneau Company receive for its $200,000 loan?
2. What was the real interest rate paid by Morneau?
3. Prepare a footnote for the annual report of Morneau Company explaining the compensating balance.
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1 Morneau is not able to use 25000 of the 200000 loan because it must be kept in its a...View the full answer
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Related Book For
Introduction to Financial Accounting
ISBN: 978-0133251036
11th edition
Authors: Charles Horngren, Gary Sundem, John Elliott, Donna Philbrick
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