Daayata Department Store wishes to discount two notes receivable arising from the sale of merchandise in order to meet some maturing obligations. Both notes have a face amount of P50,000 each and are due in one year. Note A is a non-interest bearing note while Note B is to be paid with an interest of 12%. The bank rate in discounting the notes is 12%. 39. Assuming that the notes were discounted ten months prior to maturity, the total proceeds from both notes discounted is:

Daayata Department Store wishes to discount two notes receivable arising from the sale of merchandise in order to meet some maturing obligations. Both notes have a face amount of P50,000 each and are due in one year. Note A is a non-interest bearing note while Note B is to be paid with an interest of 12%. The bank rate in discounting the notes is 12%. 39. Assuming that the notes were discounted ten months prior to maturity, the total proceeds from both notes discounted is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Daayata Department Store wishes to discount two notes receivable arising from the sale of merchandise in order to meet some maturing obligations. Both notes have a face amount of P50,000 each and are due in one year. Note A is a non-interest bearing note while Note B is to be paid with an interest of 12%. The bank rate in discounting the notes is 12%. 39. Assuming that the notes were discounted ten months prior to maturity, the total proceeds from both notes discounted is:
On April 26, two notes are discounted at the same rate t .The face of the first note is $7370 with a due date on May 31.The second note has a face value of $7430 with a due date on June 30. Determine the rate t , if the owner of the notes gets the same rate amount for the notes from the bank.
Brooke Company discounted its own P5, 000,000 one year note at a bank, at a discount rate of 12%, when the prime rate was 10%. In reporting the note in Brooke’s statement of Financial position prior to maturity, what rate should Brooke use for the recording of Interest expense?
Wenzy Company discounted its own ₱250,000 one-year note at a bank, at a discount rate of 12% when the prime rate was 10% Based on the above data, answer the following: 1. In reporting the note in Wenzy’s statement of financial position prior to maturity, what rate should Wenzy use for the recording of interest expense? a. 10.0% c.12.0% b. 10.7% d.13.6% 2. The journal entry to record the transaction will include a a. Debit to Cash ₱250,000 b. Debit to Cash for ₱220,000 c. Debit to Discount on notes payable ₱40,000 d. Credit to Notes payable, ₱220,000
Karen Company discounted its own Php 250,000 one year note at a bank at a discount rate of 12% when the prime rate was 10%. Required: Based on the above data, answer the following: 1. In reporting the note in Karen Company statement of financial position, prior to maturity what rate should Karen Company use for the recording of interest expense? 2. What is the journal entry?
A note with a face value of BD 2,600 will mature after 3 Years from today is sold to a bank that uses a 6% annual compound interest rate. The bank deducted BD15 as a commission and BD72 as a collection charge. Find the net present value and total discounts.
Al Havier Manufacturing received a Php 350,000 promissory note at 11% simple interest for 96 days from one of its customers. After 70 days Al Havier discounted the note at the Short West Bank at a discount rate of 15%. The note was made on September 12. a. What is the maturity date of the note? b.What is the maturity value of the note? c. What is the discount date of the note? d. What proceeds will Al Havier receive after discounting the note? e. How much Al Havier Manufacturing will receive from its customer after 70 days? f. How much Al Havier Manufacturing will receive from Short West Bank? g. How much Short West Bank will receive from the customers of Al Havier manufacturing?
X Corporation accepted a P400,000 face value, six-month, 10% note dated May 15 from a customer. On that same date, X Corporation discounted the note at Metrobank at a 12% discount rate. 1. How much should X Corporation receive from the bank on May 15? 2. Assume that X Corporation discounted the note four months prior to its maturity date, what is the proceeds from discounting the note?
A company received in payment for the merchandise sold an interest bearing note with a face amount of 100,000, an annual interest rate of 12%, and a term of 6 months. The company sold this note to bank, at discount rate of 15%, when the note had 90 days remaining to maturity. How much interest expense should the company report as a result of discounting, assuming the discounting is accounted for as a secured borrowing?
On January 1, 2022, Easy Company sold merchandise for 500,000 by accepting a note for 6 months with interest to be paid at maturity at 12%. On March 1, the entity discounted the note without recourse at a bank with a 15% discount. How much is the maturity value of the notes receivable?
Cullumber Inc. assigns $4728000 of its accounts receivables as collateral for a $3.30 million loan with a bank. The bank assesses a 3% finance charge on the loan amount and charges interest on the note at 6%. What would be the journal entry to record this transaction? O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Accounts Receivable for $3300000 O Debit Cash for $3003000, debit Interest Expense for $297000, and credit Notes Payable for $3300000 O Debit Cash for $1890800, debit Interest Expense for $99000, debit Due from Bank for $1428000, and credit Accounts Receivable for $4728000 O Debit Cash for $3201000, debit Interest Expense for $99000, and credit Notes Payable for $3300000
On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of $150,000. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 10%.b. Determine the proceeds of the note, assuming the note is discounted at 10%.