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NemiM [27]
3 years ago
15

Federal Bank of America has loaned $9,000 to Southgate Animal Hospital, using a 90-day non-interest-bearing note. The bank disco

unted the note at 8%. The debit to Discount on Notes Payable in the general journal will be in the amount of
Business
1 answer:
eduard3 years ago
7 0

Answer: $180

Explanation:

From the question, Federal Bank of America has loaned $9,000 to Southgate Animal Hospital, using a 90-day non-interest-bearing note. The bank discounted the note at 8%.

Therefore, the debit to Discount on Notes Payable in the general journal will be:

= $9,000 × 8% × 90/360

= $9,000 × 8/100 × 1/4

= $9,000 × 0.08 × 0.25

= $180

The correct answer is $180

It should be noted that we used 360 days for a year.

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LLC

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This shorter payback period is positive and beneficial to the consumer, as it allows for harmony with amortization expenses.

We can arrive at this answer because:

  • A short payback period is beneficial because of its relationship to amortization, as long-term debt allows this amortization to take place.
  • These amortization expenses allow the cost of long-term assets to be represented in the payment.
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