On March 1, 2016 Giant Jumbo Clown Costumes Borrowed Money

question 59

Essay

On March 1, 2016 Giant Jumbo Clown Costumes borrowed money from their bank Second Friendly National Bank by issuing a $125,000, 180 day, non-interest bearing note. The note was discounted to 13.5%.
Compute the following:
1) How much money did Giant Jumbo receive?
2) What was the total amount of interest paid?
3) What is the effective 180 day interest rate on this note payable? Round to 4 decimals)
4) What is the approximate annual effective interest rate on this note payable?
5) Record the journal entryies)for the issuance of the note.

---

Definitions:

Neo-Piagetian Research

A field of study that extends and modifies Jean Piaget's theory of cognitive development, incorporating new findings on information processing, memory capabilities, and individual differences in children.

Cognitive Functioning

Refers to the mental processes involved in acquiring knowledge and understanding, including thinking, knowing, remembering, judging, and problem solving.

Developmental Stages

Distinct phases of growth and development that an individual passes through from infancy to adulthood, each characterized by unique physical, psychological, or cognitive changes.

Formal Operational Thought

A stage in Piaget's theory of cognitive development where individuals develop the ability to think about abstract concepts.