A $7,000 non-interest-bearing promissory note is discounted at
10% compounded quarterly, two years before maturity. What...
A $7,000 non-interest-bearing promissory note is discounted at
10% compounded quarterly, two years before maturity. What are the
proceeds from the sale of the note?
Canterbury Co. issues a discounted, non-interest-bearing note in
exchange for borrowed funds. Choose whether the cash received will
be higher or lower than the face value of the note, and whether the
effective annual interest rate will be higher or lower than the
discount rate:
Cash Received vs. Face Value of Note
Effective Rate vs. Discount Rate
a. Higher Lower
b. Lower Higher
c. Lower Lower
d. Higher Higher
How is Interest-Bearing Note different from Non-Interest
Bearing Note?
How are the journal entries different for each of
them? Provide examples of each joirnal entry.
1. The journal entry to record the payment at maturity of an
interest-bearing note is
A. debit Accounts Payable; credit Cash
B. debit Notes Payable and Interest Receivable; credit Cash
C. debit Notes Payable and Interest Expense; credit Cash
D. debit Cash;
credit Notes Payable
2. The entry to record the issuance of common stock at a price
above par includes a debit to
A. Common Stock
B. Paid-In Capital in Excess of Par—Common Stock
C. Cash
D. Organizational Expenses...
aa 9 year promissionary note of $1100 with interest of
3.8 % compounded quaterly was discounted at 6 % compounded semi
annually hielding proceeds of $7600. how many mnths befoe the due
date was the discounting rate
A debt of $10 000.00 with interest at 8% compounded
quarterly is to be repaid by equal payments at the end of every
three months for two years.
a) Calculate the size of the
monthly payments.
b) Construct an amortization
table.
c) Calculate the outstanding
balance after three payments.
Amortization
Table
Payment
Number
Amount
Paid
Interest Paid
Principal
Repaid
Outstanding
Principal Balance
0
1
2
3
4
5
6
7
8
Barbara borrowed $12 000.00 from the bank at...
You are saving $100
for two years with 10% interest rate (annually compounded).
a. What is FV at the
end of year 2?(and show the equation)
b. What is the
interest earned on interest? (and show the equation)
What lump sum deposited today at 12% compounded quarterly for
10 years will yield the same final amount as deposits of $3000 at
the end of each 6-month period for 10 years at 10% compounded
semiannually?
The value of the lump sum is $___
3. Non-interest bearing
note
On June 30, 2016, the Esquire Company sold some merchandise to a
customer for $30,000 and agreed to accept as payment a
noninterest-bearing note with an 8% discount rate requiring the
payment of $30,000 on March 31, 2017. The 8% rate is appropriate in
this situation.
Required:
Prepare journal entries to record the sale of merchandise (omit
any entry that might be required for the cost of the goods sold),
the December 31, 2016 interest accrual,...
On Jan. first, 2018, Snuff Company accepts 60000 non-interest
bearing note from a customer for the sale of goods. The note is to
be paid in 3 equal installments every Dec. 31st (first payment on
Dec. 31, 2018). An assumed interest rate of 10% is implied. Round
installment payments to the nearest dollar.
pt 1: Determine the PV of the note. Show all computations or
calculator imputs.
pt 2: Prepare an amortization table in Excell to show the
revenue recognized...
On January 1, 2018 Kimmel Company accepts a $53000 non interest
bearing note from a customer for services provided. The note is to
be paid in 4 equal installments every 6 months (payments every July
1 and January 1 with the first payment on July 1, 2018) An assumed
interest rate of 9% is implied. Round installments to the
nearest dollar.
A) Prepare an amortization table for this note. Round amounts to
the nearest dollar. Clearly label your rows with...