Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 9, Problem 21MC
A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time?
A. $7,150
B. $65,000
C. $14,300
D. $2,383
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Determine the due date and the amount of interest due at maturity on the following notes:
Date of Note
Face Amount
Interest Rate
Term of Note
a.
January 10*
$40,000
5%
90 days
b.
March 19
18,000
8
180 days
c.
June 5
90,000
7
30 days
d.
September 8
36,000
3
90 days
e.
November 20
27,000
4
60 days
*Assume that February has 28 days.
Assume 360-days in a year when computing the interest.
Note
Due Date
Interest
a.
$fill in the blank 2
b.
fill in the blank 4
c.
fill in the blank 6
d.
fill in the blank 8
e.
fill in the blank 10
What is maturity value of the note ?
Cash is borrowed on a 2-month note payable. If the interest cost to borrow is RO 400, and the cash proceeds received and available to use for the 60-day period is RO19600 what is the actual interest rate on this note?
a.
12.24%
b.
12.00%
c.
10.00%
d.
12.45%
Chapter 9 Solutions
Principles of Accounting Volume 1
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Ch. 9 - Which of the following best represents a positive...Ch. 9 - South Rims has an accounts receivable balance at...Ch. 9 - What information can best be elicited from a...Ch. 9 - Ancient Grains Unlimited has an accounts...Ch. 9 - Which of the following is not a way to manage...Ch. 9 - Which of the following is true about earnings...Ch. 9 - Which statement is most directly affected by a...Ch. 9 - Michelle Company reports $345,000 in credit sales...Ch. 9 - Which of the following is true of a maturity date?...Ch. 9 - Mark Industries issues a note in the amount of...Ch. 9 - A customer takes out a loan of $130,000 on January...Ch. 9 - A company collects an honored note with a maturity...Ch. 9 - Orion Rentals is unable to collect on a note worth...Ch. 9 - What is the matching principle?Ch. 9 - A beverage wholesale outlet sells beverages by the...Ch. 9 - On January 1, a flower shop contracts with...Ch. 9 - American Signs allows customers to pay with their...Ch. 9 - Which account type is used to record bad debt...Ch. 9 - Earrings Depot records bad debt using the...Ch. 9 - Racing Adventures records bad debt using the...Ch. 9 - Aron Larson is a customer of Bank Enterprises. 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