Question: Your friend needs to buy a $ 1,000 component to replace some essential sound equipment. He has neither that much cash nor credit available. He

Your friend needs to buy a $ 1,000 component to replace some essential sound equipment. He has neither that much cash nor credit available. He has heard of promissory notes and asks for your help. Explain the concept of a promissory note. Also explain what it will mean when your friend signs the note and why the total of the payments on the note at maturity will be greater than the original $ 1,000.

Step by Step Solution

★★★★★

3.49 Rating (156 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

A promissory note is a formal written promise to pay A maker pr... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

339-B-A-N-I (219).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

A potato farmer needs to buy a new harvester. Two types have performed satisfactorily in field trials. The SpudFinder costs $140,000 and should last for five years. The simpler TaterTaker costs only...

Raiders Restaurant is considering the purchase of a $10,000,000 flat-top grill. The grill has an economic life of 7 years and will be fully depreciated using the straight-line method. The grill is...

Monica needs to buy a present for her best friend. She can buy it online or she can travel 30 miles to buy at the store. She is not sure which would be less expensive considering shipping and...

Entrepreneurship Topic: How Do I Operate An Enterprise? (Managing Money) ? Activity 1 ? Activity 2 ? Activity 3 ? V. Evaluation ? Additional Readings Hello tutors, please add a brief explaination to...

please help me. I can pay only 70 dollars in this assignment Topic 1 & 2 Introduction to financial management and the Australian Taxation system Financial Markets 2 Learning Objectives Describe what...

Warren Buffett?s Annual Shareholder Letter (page numbers for your convenience, but may not be comprehensive) 1. Describe the methods Warren Buffett uses to measure both his own firm?s performance and...

4) Parktown Realty Inc developed an upscale condominium complex. On October 1, Miranda Wine signed an offer to purchase one of the units. Part of that document said, "This offer is irrevocable by the...

Question: Case 16 The Maria and Sancho Ruiz Case A COMPREHENSIVE FINANCIAL PLANNING CASE Maria Ruiz recently turned age fifty. She heard about your firm from a neighbor who recommended your services...

studentnumberendswitha5 to Bob that with LOC of $25,000, Bod is able to borrow any amount up to $25,000 at any time whenever he needs the money, the interest will be charged upon the usage of the...

Hi, I have an Assignment for my Finance Subject. I have attached the necessary documentation here for you to view including the Lecture slides of all the Topics covered for this assignment. Please...

Think about how a CIO can determine whether a business will benefit enough from a specific hardware/software upgrade to justify its purchase. What information would he or she need? How might past...

Use SolverTable on the solved problem to identify changes in interview types and total cost for changes in the number of total interviews required. Rationale: accuracy and precision requirements for...

Pseudocode, Test Plan, Test Case, Flowchart for this ( JAVA ) ( Business: check ISBN - 1 3 ) ISBN - 1 3 is a new standard for identifying books. It uses 1 3 digits d 1 d 2 d 3 d 4 d 5 d 6 d 7 d 8 d 9...

MIRR [LO6] Slow Ride plc is evaluating a project with the following cash flows: The company uses a 12 per cent interest rate on all of its projects. Calculate the MIRR of the project using all three...

Describe the four accounting entries for the liquidation of a partnership.

Lisa Morris and Joyce Laski agreed on September 1 to go into business as partners. According to the agreement, Morris is to contribute $45,000 cash and Laski is to contribute $65,000 cash. Provide a...

Karen Rhea and Wayne Sellevaeg decided to form a partnership on July 1, 20-1. Rhea invested $100,000 and Sellevaeg invested $50,000. For the fiscal year ended June 30, 20-2, a net income of $90,000...

6. (TCO 4) Ignoring the option to expand: (Points : 4) overestimates the internal rate of return on a project. ignores the possibility that a negative net present value project might be positive,...

Select a major industrial or commercial company based in the United States and listed on one of the major stock exchanges in the United States. Each student should select a different company. Avoid...

Olsen Outfitters Inc. believes that its optimal capital structure consists of 60% common equity and 40% debt, and its tax rate is 40%. Olsen must raise additional capital to fund its upcoming...