Proceeds from Notes Payable On September 1 Vibrant Salon Com

Proceeds from Notes Payable On September 1, Vibrant Salon Company issued a 60-day note with a face amount of $37,200 to Osborne Hair Products Company for merchandise inventory. Assume a 360-day year 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%.

Solution

Answer

a ) proceeds of note = 37200

proceeds implemented what we receive as a result of issue of note but not ppayment of note

b) proceeds of note =

= 37200 - 37200 * 6 % * 60 / 360

= 37200 - 372

= 36828