A disclaimer that the employee handbook is not a binding contract and an explanation of the proper procedures and reasons that an employee can be fired.
Present Value involves discounting, and future value involves compounding.
The find present value of a dollar a year from now, we must discount by the discount rate, since a dollar a year from now is not worth as much as a dollar today.
To find the future value (in a year) of a dollar we receive today, we increase the dollar by the discount rate, since our dollar today is worth more than a dollar a year from now.
Answer:
Option (B) is correct.
Explanation:
On November 21,
Note amount = $6,000
Period = 60-day
Interest rate = 12%
When Note is not paid by the market at maturity, then
The Accounts Receivable Account is debited with the Par Value of Note plus interest income and credited Notes Receivables $6,000 and Credit Interest Revenue $120.
Therefore, the journal entry is as follows:
Accounts Receivable A/c Dr. $6,120
To Notes Receivables $6,000
To Interest Revenue $120
(To record the note)