[单项选择]A note receivable is a negotiable instrument, which means it is readily transferable from one business or person to another and may be sold for cash. To get cash quickly, payees sometimes sell a note receivable to another party before the note matures. The payee endorses the note and hands it over to the note purchaser--often a bank--who collects the maturity value of the note at the maturity date.
Selling a note receivable before maturity is called discounting a note receivable because the payee of the note receives less than its maturity value. This lower price decreases the amount of interest revenue the payee earns on the note. Giving up some of this interest is the price the payee is willing to pay for the convenience of receiving cash early.How is discounting period calculated
A. From December 9, 1994 to January 18, 1995.
B. The discounting period begins with the date of making the note and end with date of selling it to the note purchaser.
C. The number
A. $ 15 170
B. Notereceivable
C. Dorman Builders
D. $ 15 000
E. InterestRevenue
F. $170
G. TORECORD DISCOUNTING NOTE RECEIVABLEAt maturity the bank collects 15 375 from the maker of the note, earning 205 of interest revenue.
H. Observetwo points in the above computation: (1) The discounting is computed on the maturity value of the note (principal plus interest) rather than on the original principal amount, and (2) the discounting period extends backwards from the maturity date (January 18, 1995) to the date of discounting (December 9, 1994).