A $5,500,10% Note Dated May 20 for 78 Days Was

question 89

Multiple Choice

A $5,500,10% note dated May 20 for 78 days was discounted on June 23 at 12%.The amount of the discount (using a 360-day year) is:

• A)$119.16.
• B)$191.16
• C)$124.89.
• D)$82.41.

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Definitions:

Retained Earnings

Accumulated net income of a company that has not been distributed to shareholders as dividends.

Paid-In Capital

Paid-in capital is the amount of money that a company has received from shareholders in exchange for shares of stock.

Issuing Stock

The process by which a company raises capital by distributing shares of its ownership to investors.

Corporations

Business entities that are legally separate from their owners, providing limited liability protection to its shareholders.