Suncare Company installs switching systems and receives its pay in the form of notes receivable. It installed a system for the city of Edson, Alberta, receiving a 9-month, 10 percent, $200,000 note receivable on May 31, 2023. To obtain cash quickly, Suncare discounted the note with HSBC Bank on June 30, 2023. The bank charged a discount rate of 11 percent.

Compute Suncare’s cash proceeds from discounting the note. Follow the five-step procedure outlined in Exhibit 9–1A. Round to the nearest dollar.

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EXHIBIT 9-1A | Discounting (Selling) a Note Receivable: EMCO Ltd. Discounts the Dartmouth Builders Note Steps Computations 1. Compute the original amount of interest on the note receivable. 2. Maturity value of note = Principal + Interest 3. Determine the period (number of days, months, or years) the bank will hold the note (the discount period). 4. Compute the bank's discount on the note. This is the bank's interest revenue from holding the note. 5. Seller's proceeds from discounting the note receivable* = Maturity value of note - Bank's discount on the note $15,000 X 0.10 X ⁹0/365 $15,000 + $370 Dec. 9, 2022 to Jan. 18, 2023 $15,370 x 0.12 x 40/365 $15,370 - $202 = = = $370 $15,370 40 days $202 $15,168