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Chapter 9 - Discounting of NR

This document contains solutions to problems from Chapter 9 involving calculations related to notes receivable. It includes calculations of principal, interest, maturity value, discounts, net proceeds, carrying value, and losses on notes receivable discounting for multiple notes with varying interest rates, time periods, and discount percentages. The problems demonstrate how to compute these amounts and identify losses from discounting notes receivable.

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Anne Mauricio
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352 views3 pages

Chapter 9 - Discounting of NR

This document contains solutions to problems from Chapter 9 involving calculations related to notes receivable. It includes calculations of principal, interest, maturity value, discounts, net proceeds, carrying value, and losses on notes receivable discounting for multiple notes with varying interest rates, time periods, and discount percentages. The problems demonstrate how to compute these amounts and identify losses from discounting notes receivable.

Uploaded by

Anne Mauricio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 9

Problem 9-8
Question 1 C
Principal 500,000
Interest (500,000 x 8%) 40,000
Maturity value 540,000
Discount (540,000 x 10% x 6/12) (27,000 )
Net proceeds 513,000

Question 2 C
Principal 500,000
Interest receivable (500,000 x 8% x 6/12) 20,000
Carrying value of the note 520,000

Net proceeds 513,000


Carrying value of the note 520,000
Loss on note receivable discounting (7,000 )

Problem 9-9
Question 1 C
Principal 2,000,000
Discount (2,00,,000 x 10% x 6/12) (100,000 )
Net proceeds 1,900,000

Question 2 A
Net proceeds 1,900,000
Principal 2,000,000
Loss on note receivable discounting (100,000 )

Problem 9-10
Question 1 A
Principal 4,000,000
Interest (4,000,000 x 12% x 9/360) 120,000
Maturity value 4,120,000
Discount (4,120,000 x 15% x 60/360) (103,000 )
Net proceeds 4,017,000

Question 2
Principal 4,000,000
Interest receivable (4,000,000 x 12% x 60/360) 40,000
Carrying value of the note 4,040,000
Net proceeds 4,017,000
Loss on note receivable discounting (23,000 )
Problem 9-11
Question 1 C
Principal 6,000,000
Interest (6,000,000 x 10% x 6/12) 300,000
Maturity value 6,300,000
Discount (6,300,000 x 12% x 4/12) (252,000 )
Net proceeds 6,048,000

Question 2 C
Principal 6,000,000
Interest receivable (6,000,000 x 10% x 2/12) 100,000
Carrying value of the note 6,100,000
Net proceeds 6,048,000
Loss on note receivable discounting (52,000 )

Problem 9-12
Question 1 A
Principal 6,000,000
Interest (6,000,000 x 10% x 9/12) 450,000
Maturity value 6,450,000
Discount (6,450,000 x 12% x 6/12) (387,000 )
Net proceeds 6,063,000

Question 2 C
Principal 6,000,000
Interest receivable (6,000,000 x 10% x 3/12) 150,000
Carrying value of the note 6,150,000
Net proceeds 6,063,000
Loss on note receivable discounting (87,000 )

Question 3 C
Maturity value 6,450,000
Protest fee charged by bank 50,000
Total receivable 6,500,000
Interest (6,500,000 x 12% x 3/12) 195,000
Amount collected on December 31, 2017 6,695,000

Question 3 B
Interest expense 87,000

Problem 9-13
1 B
2 B
3 C
4 B
5 B

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