Chang Co. issued a $50,000, 120-day, discounted note to Guarantee Bank. The discount rate is 6%. Assuming a 360-day year, the cash proceeds to Chang Co. are

Question

Quizplus · Accepted Answer

The cash proceeds can be calculated using the formula for the discount: Proceeds = Face Value - (Face Value * Discount Rate * (Time/360)). Here, it's $50,000 - ($50,000 * 6% * (120/360)) = $50,000 - $1,000 = $49,000.

Chang Co Issued a $50,000, 120-Day, Discounted Note to Guarantee Bank