78) On October 1, 2018, Parker, Inc. made a loan to one of its customers. The cu

Question

78) On October 1, 2018, Parker, Inc. made a loan to one of its customers. The customer signed a 9 9) month note for $110,000 at 14%. Calculate the maturity value of the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) A) $98,450 B) $121,550 C) $94,600 D) $125,400 79) If the maker of a note does not pay at maturity A) interest revenue cannot be accrued ine tor the amount of the note's principal only B) the Accounts Receivable account increases for the amount of the note's principal only C) the debtor no longer owes the payee D) the note is no longer in force because it has expired on the note before the maturity date

Explanation / Answer

78) answer : B) $121550

=> Maturity value = Principle + interest = 110000 + (110000*14%*9/12) = 110000 + 11550 = $121550

79) answer : D) the note is no longer in force because it has expired.

=> Every note has a time period and beyond that period it got expired, so if the note is not honoured on maturity, no more remain in force and expired.

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