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Proceeds from Notes Payable On January 26, Vibrant Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $43,200. Assume a 360-day year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 6%.

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Tundexi

Answer:

a. Proceeds from the note are $43,200.

b. Proceeds from the note = $42,552

Explanation:

b) Determine the proceeds of the note, assuming the note is discounted at 6%.

a. The notes are issued at the face value and thus the proceeds from the notes are $43,200.

b. Proceeds from the note = Face value of note - (Face value * Interest rate * Period due)

Proceeds from the note = $43,200 - ($43,200 * 6% * 90/360)

Proceeds from the note = $43,200 - $648

Proceeds from the note = $42,552

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