Solve the Problem. -A Holder of a $3,000, 10%, 120-Day Note Dated June

question 104

Multiple Choice

Solve the problem.
-A holder of a $3,000, 10%, 120-day note dated June 2 decides to sell the note at a discount. The note is sold on July 23 at a discount of 12%. Find the proceeds.

• A)$3,028.70
• B)$2,987.18
• C)$3,040.58
• D)$3,027.67

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Definitions:

Deductive Reasoning

An approach to theory development that begins with a description of desired outcomes and leads to principles and, in turn, specific actions that should result in those desired outcomes.

Conceptual Framework

A system of interrelated objectives and fundamentals that guides the development of accounting standards.

Inductive Reasoning

An approach to theory development that begins with observations of practice and leads to inferences about principles, assumptions and objectives.

Credit Balance

An accounting term describing a situation where the credits in an account exceed the debits, often indicating a liability or revenue.