First, Find the Initial Proceeds of the Simple Discount Note

question 98

Multiple Choice

First, find the initial proceeds of the simple discount note. Then, find the discount period, the discount, and proceeds after discounting.
-Date Loan Was Made: Jan. 19
Maturity Value: $20,000
Length of Loan: 60 days
Rate: 10%
Date of Discount: Mar. 7
Discount %: 10%

• A)Initial Proceeds: $19,666.67;
• Discount Period: 13 days;
• Discount: $355.56;
• Proceeds After Discount: $39,927.78
• B)Initial Proceeds: $39,666.67;
• Discount Period: 15 days;
• Discount: $344.44;
• Proceeds After Discount $39,927.78
• C)Initial Proceeds: $19,666.67;
• Discount Period: 13 days;
• Discount: $72.22;
• Proceeds After Discount: $19,927.78
• D)Initial Proceeds: $59,666.67;
• Discount Period: 15 days;
• Discount: $411.11;
• Proceeds After Discount: $59,927.78

---

Definitions:

Period Costs

Costs that are expensed in the period in which they are incurred, rather than being capitalized.

Reportable Segment

A component of a business that earns revenues and incurs expenses, and for which separate financial information is available and regularly reviewed by the entity's chief operating decision-maker in deciding how to allocate resources and assess performance.

Operating Segment

A component of a business that engages in business activities from which it may earn revenues and incur expenses, and for which discrete financial information is available.

Asset Group

A collection of assets that share similar characteristics and are accounted for together in financial reporting.