On July 7,A-1 Credit Union Loaned $500,000 to Bridal Retail

question 36

Multiple Choice

On July 7,A-1 Credit Union loaned $500,000 to Bridal Retail Shop on a 90 day,4% note.What is the maturity date of the note?

• A) October 7
• B) October 5
• C) October 6
• D) October 8

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, representing the interest payable on any type of debt, including loans, bonds, or credit lines.

Discount

A reduction applied to the regular price of goods or services, or the difference between the nominal value of a financial instrument and its lower selling price.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time, typically associated with bonds, loans, and credit lines.

Straight-Line Method

A method of calculating depreciation by evenly allocating the cost of an asset over its useful life.