A 60-Day, 12% Note for $7,000, Dated April 15, Is

question 193

Multiple Choice

A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is

• A) $6,860
• B) $7,140
• C) $7,840
• D) $7,000

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Definitions:

Formal Contract

A legally binding agreement that requires a specific form, such as being in writing, to be valid.

Bond

A fixed income investment in which an investor loans money to an entity that borrows the funds for a defined period.

Restatement (Second)

A collection of model legal rules and principles meant to clarify the common law in the United States, not binding but influential.

Law of Contracts

A set of laws that govern the formation, execution, and enforcement of agreements between parties.