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attashe74 [19]
2 years ago
14

Carl Sonntag wanted to compare what proceeds he would receive with a simple interest note versus a simple discount note. Both ha

d the same terms: $19,500 at 8% for 2 years. Use ordinary interest as needed
Compare the proceeds.
Business
1 answer:
nadya68 [22]2 years ago
3 0

Answer:

The proceeds from the simple discount note is $16380 , while that of simple interest is $19500

Explanation:

Simple discount notes could likened to a bank loan where interest on the loan is taken from the borrowed funds before disbursement to the loan's beneficiary,hence proceeds from such notes is face value of the notes less interest taken in advance.

While on the other hand,the proceeds from simple interest note is par or face value.

The discount or interest  is =8%*$19500=$1560 for one year,but $3120  for two years($1560*2)

The proceeds on the simple discount note =$19500-$3120

                                                                         =$16380

The proceeds on the simple interest note is face value of $19500

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Option a

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3 years ago
What is everyone planning to do this summer?
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6 0
2 years ago
Juan Foods pays off a long-term debt in full. Which one of the following statements best describes the appropriate book-keeping
tankabanditka [31]

Answer:

Debit long-term debt; Credit cash.

Explanation:

The Journal Entry is shown below:-

Long term Dr, XXXXXXXX

To Cash

(being long term is recorded)

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3 years ago
On December 31, Leann Corp. paid $5,120 on an installment note that requires annual payments. The outstanding loan balance on Ja
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Answer:

Dr Interest expense  $4,000

Dr Notes payable      $1,120

Explanation:

The $5,120 repaid comprised of both interest and principal repayments,hence there is need for the amount to be split into the two appropriate accounts.

The interest payable on the loan on yearly basis ,based on the outstanding loan balance of $50,000 is $4,000(8%*$50,000),hence the balance of $1,120($5,120-$4,000) represents the actual repayment of principal,as a result the notes payable account should be debited with $1,120.

3 0
3 years ago
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