Odom Company received from a customer a one-year, 250,000 note bearing annual interest of 8%. After Holding the note for six months, Odom discounted the note at Mbank at an effective interest rate of 10%. What amount of cash did Odom receive from the bank?

Odom Company received from a customer a one-year, 250,000 note bearing annual interest of 8%. After Holding the note for six months, Odom discounted the note at Mbank at an effective interest rate of 10%. What amount of cash did Odom receive from the bank?

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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Question

Odom Company received from a customer a one-year, 250,000 note bearing annual interest
of 8%. After Holding the note for six months, Odom discounted the note at Mbank at an
effective interest rate of 10%.
What amount of cash did Odom receive from the bank?

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