On January 8, Lawrence Co. issued a $60,000, 120-day discounted note to Raines Bank. The discount rate is 8%. Assuming a 360-day year, what is the amount of proceeds received

the amount of proceeds received is $58,400

Explanation:

The computation of the amount of proceeds received is shown below:

The Amount of proceeds received is

= Issued note amount - (Issued not amount × discount rate × given days ÷ total number of days in a year)

= $60,000 - ($60,000 × 8% × 120 days ÷ 360 days)

= $60,000 - $1,600

= $58,400

hence, the amount of proceeds received is $58,400

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