A Note Dated May 1, 2011 Promises the Payment of $5660.00

question 43

Essay

A note dated May 1, 2011 promises the payment of $5660.00 with interest at 6.5% p.a. compounded semi-annually on November 1, 2015. Find the proceeds of the sale of the note on May 1, 2013 if money was then worth 7.2% p.a. compounded monthly.

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Definitions:

Owner's Drawings

These are the withdrawals of cash or other assets by the owner from the business for personal use.

Owner's Capital

The amount of equity in a company that belongs to the owner, including initial investment plus any retained earnings.

Salaries Expense

Represents the total amount paid to employees for services rendered during a particular period.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board that is globally accepted for financial reporting.