On June 8, Williams Company issued an $80,000, 5%, 120-day note payable to Brown Industries. Assuming a 360-day year, what is the maturity value of the note?
A) $82,600
B) $84,000
C) $81,333
D) $88,200

Question

Quizplus · Accepted Answer

Step 1: Find the interest on the note payable: 
Interest = Principal x Rate x Time 
= $80,000 x 5% x 120/360 
= $1,333.33

Step 2: Find the maturity value of the note payable: 
Maturity Value = Principal + Interest 
= $80,000 + $1,333.33 
= $81,333.33

Therefore, the correct answer is C.

On June 8, Williams Company Issued an $80,000, 5%, 120-Day