Roth Company received from a customer a one-year, P500,000 note bearing an annual interest of 8%. After holding the note for six months, the entity discounted the note at 10%. What is the discount from the discounting of note?
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Q: How much was Bae’s proceeds from the discounted note?
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A: Step 1 The bank discount rate is based on the instrument's par value and the amount of the notes…
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A: a. In this case, the note is not discounted. Hence, the proceeds amount of the note is equal to the…
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A: Cash Proceeds from Notes Receivable = Present Value of Notes
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A: The discounted note receivable is getting money from bank against customers' note receivable.
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A: Maturity value of note = issue price + interest accrued over term (for 120 days)
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A: Since you have asked multiple question, we will solve the first question for you. If you want any…
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A: The interest revenue is the interest earned by the company during the period.
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- Foremost Company received from a customer a one-year, P500,000 note bearing annual interest of 8%. Alter holding the note for six months, the entity discounted the note at the bank at an effective interest rate of 10%. What is the loss on note receivable discounting?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?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?
- 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: 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? What is the journal entry?Watson Company issued a 60-day, 8% note for $18,000, dated April 5, to Laker Company on account. Assume a 360-day year when calculating interest. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. c-1. Journalize the entries to record the receipt of the note by the payee.* c-2. Journalize the entries to record the receipt by the payee of the amount due on the note at maturity.* *Refer to the Chart of Accounts for exact wording of account titles. Round answers to the nearest $1. Required: a. Determine the due date of the note. b. Determine the maturity value of the note. c-1. Journalize the entries to record the receipt of the note by the payee.* c-2. Journalize the entries to record the receipt by the payee of the amount due on the note at maturity.* *Refer to the Chart of Accounts for exact wording of account titles. Round answers to the nearest $1. X First Questions…Company received from a customer a one-year, P500,000 note bearing annual interest of 8%. After holding the note for six months, the entity discounted the note without recourse at 10%. What is the loss on note receivable discounting?
- ABS-CBN COMPANY received from a customer a one-year, $500,000 note bearing annual interest of 8%. Five months prior to maturity, ABS-CBN COMPANY discounted the note at Asia United Bank at an effective interest rate of 10%. Required: Compute for the amount of proceeds from the note discounting and provide the entries for the discounting, assuming the note was discounted without recourse.Lucky company borrowed an amount of money from ZER Finance Co. In return, ZER Finance Co received a $ 200,000, 4 year, 6% note from Lucky. On the date of the transaction, the market rate on interest was 8% for a similar note. Instructions: Calculate the net carrying value of the notes receivable on the books of ZER Finance, at the end of year one assuming that Zer is using effective interest method to amortize discount or premium on note receivable The following information might help you: Present value of a future sum factor, 6%, 4 years= 0.7921 Present value of a future sum factor, 8%, 4 years= 0.7350 Present value of an ordinary annuity factor, 6%, 4 years= 3.5 Present value of an ordinary annuity factor, 8%, 4 years= 3.3 (When writing your answer do not use commas or sign of the dollar. For example, if your answer is $1,500, write it as 1500) Answer:A P2,400,000, 6-month, 10% note dated May 1 is received from a customer by an entity and discounted with recourse by First Bank on July 1 at 12%. Based on conditional sale, compute for the following; a. Net proceeds b. Discount period c. Carrying amount of note receivable d. Gain or loss on note receivable discounting e. Journal entry for the conditional sale f. Journal entry, note is paid by maker on maturity g. Journal entry, note is dishonored by maker, entity pays the Bank the maturity value plus protest fee and other bank charges of P5,200.
- BBY Company loaned $66,116 to Orwell, Inc, accepting Orwell's 2-year, $80,000, zero-interest-bearing note. The implied interest rate is 10%. Prepare BBY's journal entries for the initial transaction, recognition of interest each year, and the collection of $80,000 at maturity. Debit - Notes Receivable $80,000 Credit - Credit - Cash Debit - Credit - Debit - Credit - Interest Revenue 6.026 DEC 16 618 10On 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?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?