On August 1, 2022, Colombo Company's treasurer signed a note promising to pay $120,900 on December 31, 2022. Theproceeds of the note were $116,400.Required:a. Calculate the discount rate used by the lender.

Interest paid = Face Amount - Cash Proceeds = 120,900-116,400…

Answered: On August 1, 2022, Colombo Company's…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

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2. Assume the following information regarding a note received by HEERHUM YU Company: P1,500,000 October 1, 2020 120 days December 1, 2020 Principal amount of note receivable Date of note Term of note Date of discounting Discount rate 12% Interest income for 120 days P50,000 Compute the interest rate charged to customer. How much is the principal amount of the note receivable?
22. Subject :- Accounting On August 1, 2022, Colombo Company's treasurer signed a note promising to pay $120,300 onDecember 31, 2022. The proceeds of the note were $116,100.b. Calculate the effective interest rate (APR) on the loan.Note: Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).Effective interest rate
5. On October 1, 2021, Gomez Inc. assigns $1,600,000 of its accounts receivable to Ottawa National bank as collateral for a $1,200,000 note. The bank assesses a finance charge of 2% of the receivables assigned and interest on the note of 7%. Prepare the October 1, 2021 journal entries for Gomez.
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
Selkirk Company obtained a $16,000 note receivable from a customer on January 1, 2024. The note, along with interest at 12%, is due on July 1, 2024. On February 28, 2024, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 15%. Required: Prepare the journal entries required on February 28, 2024, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.
On August 1, 2022, Colombo Company’s treasurer signed a note promising to pay $122,700 on December 31, 2022. The proceeds of the note were $116,100. Use the horizontal model to show the effects of recording interest expense for the month of September. Indicate the financial statement effect. What is the discount on notes payable and what is the interest expense?
Descriptors are provided below for six situations involving notes receivable being discounted at a bank. In each case, the maturity date of the note is December 31, 2024, and the principal and interest are due at maturity. For each situation, determine the proceeds received from the bank on discounting the note. Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Note Note Face Value Date of Note Interest Rate 1 $ 90,000 3/31/2024 Date Discounted 8% 6/30/2024 Discount Rate Proceeds Received 10% $ 80,280 2 90,000 3/31/2024 8% 9/30/2024 10% 93,150 3 90,000 3/31/2024 8% 9/30/2024 12% 92,700 4 180,000 6/30/2024 6% 10/31/2024 10% 5 180,000 6/30/2024 6% 10/31/2024 12% 6 180,000 6/30/2024 6% 11/30/2024 10%
Selkirk Company obtained a $24,000 note receivable from a customer on January 1, 2021. The note, along with interest at 8%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank's discount rate is 10%. Required: Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale. (do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.). Tab 1) Record the accrued interest earned. Tab 2) Record the discounting of note receivable. Date General Journal Debit Credit February 28, 2021 ____________________________ ___________ ____________ _____________________________ ____________ ____________…
On August 31, 2023, an entity discounted with recourse a note at the bank at discount rate of 15%. The note was received from the customer on August 1, 2023 for 90 days with face amount of P9,000,000 and an interest rate of 12%. The discounting transaction is accounted for as secured borrowing. The customer paid the note to the bank on October 30, 2023, the date of maturity. 4. What is the interest expense to be recognize on August 31, 2023? Group of answer choices 90,000 51,750 231,750 270,000 The entry on October 30, 2023 will include Group of answer choices Debit to notes receivable discounted P9,000,000 Debit to loans payable P9,038,250 Credit cash P9,000,000 Debit to loans payable P9,000,000
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Selkirk Company obtained a $15,000 note receivable from a customer on January 1, 2021. The note, along with interest at 10%, is due on July 1, 2021. On February 28, 2021, Selkirk discounted the note at Unionville Bank. The bank’s discount rate is 12%.Required:Prepare the journal entries required on February 28, 2021, to accrue interest and to record the discounting for Selkirk. Assume that the discounting is accounted for as a sale.
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On August 1, 2022, Colombo Company's treasurer signed a note promising to pay $120,900 on December 31, 2022. The proceeds of the note were $116,400. Required: a. Calculate the discount rate used by the lender.