Financial & Managerial Accounting 13th Edition by Carl Warren , James Reeve,Jonathan Duchac

Exercise 1

A?Proceeds from notes payable
On October 12, Belleville Co. borrowed cash from Texas Bank by issuing a 30-day note with a face amount of $70,000.
a. Determine the proceeds of the note, assuming the note carries an interest rate of 6%.
b. Determine the proceeds of the note, assuming the note is discounted at 6%.
B?Proceeds from notes payable
On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 45-day note with a face amount of $150,000.
a. Determine the proceeds of the note, assuming the note carries an interest rate of 10%.
b. Determine the proceeds of the note, assuming the note is discounted at 10%.