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On May 20, Sheffield Company discounted at Sunshine Bank a $7,290 (maturity value), 139-day note ...

On May 20, Sheffield Company discounted at Sunshine Bank a $7,290 (maturity value), 139-day note dated Feb. 20. Sunshine’s discount rate was 8%. (Use Days in a year table.) What proceeds did Sheffield Company receive? (Use 360 days a year. Do not round intermediate calculations.) Proceeds received :?

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Answer #1

Discount = Maturity Value x R x T = $7290 * 0.08 * 139/360 = $225.18

Proceeds = Maturity Value - D = $7290 - $225.17 = $7064.82

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