A Promissory Note Has a Face Value of $5175

question 56

Multiple Choice

A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year. The term is for 5 months. The rate of interest is 6.75%. What is the maturity value of the note?

• A) $5324.30
• B) $5234.30
• C) $5342.30
• D) $5334.20
• E) $5444.30

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Definitions:

Bad Debt Expense

An expense reported on the income statement, representing the estimated amount of receivables that will not be collected.

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including both the principal and any accrued interest.

Due Date

The specific date by which an obligation, such as a payment or task, must be completed or fulfilled.

Journalize

The process of recording transactions in a company's journal, detailing the financial activities and their impact on accounts.