Ch.+9+Problem+Solutions

Ch.+9+Problem+Solutions - Problem 9-1B (45 minutes) Wolf...

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Unformatted text preview: Problem 9-1B (45 minutes) Wolf Products Autumn Bank City Bank 1. Maturity dates Date of the note ......................... May 23 July 15 Dec. 6 Term of the note (in days) ........ 60 90 90 Maturity date .............................. July 22 Oct. 13 Mar. 6 2. Interest due at maturity Principal of the note .................. $5,400 $8,500 $9,600 Annual interest rate .................. 8% 8% 6% Fraction of year ......................... 60/360 90/360 90/360 Interest expense ........................ $ 72 $ 170 $ 144 3. Accrued interest on City Bank note at the end of 2008 Total interest for note .............................................................. $ 144 Fraction of term in 2008 ........................................................... 25/90 Accrued interest expense ....................................................... $ 40 4. Interest in 2009 Total interest for note .............................................................. $ 144 Fraction of term in 2009 ........................................................... 65/90 Interest expense in 2009 .......................................................... $ 104 Problem 9-1B (Concluded) 5. 2008 Apr. 22 Merchandise Inventory ........................................... 6,000 Accounts Payable Wolf Products .................. 6,000 Purchased merchandise on credit....
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This note was uploaded on 01/22/2011 for the course MGT 11A taught by Professor Armstrong during the Fall '08 term at UC Davis.

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Ch.+9+Problem+Solutions - Problem 9-1B (45 minutes) Wolf...

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