WIll rate good, depending on explanation. Don't leave out the simple things.
On August 1, 2009, Columbo Co.'s treasurer signed a notepromising to pay $240,000 on Dec. 31, 2009. The proceeds of thenote were $232,000.
Required:
A. Calculate the discount rate used by the lender.
B. Calculate the effective interest rate (APR) on theloan.
C. Use the horizaontal mode to show the effects of
1. Singing the note and the receipt of the cash proceeds onAug. 1, 2009.
2. Recording interest expense for the month of Sept.
3. Repaying the note on Dec. 31, 2009.