Ireland Corporation obtained a $40,000 note receivable from a customer on June 30, 2016. The note, along with interest at 6%, is due on June 30, 2017. On September 30, 2016, Ireland discounted the note at Cloverdale bank. The bank's discount rate is 10%. What amount of loss should Ireland recognize on September 30, 2016? Please show the steps.

A. $780
B. $1,380
C. $1,800
D. $3,180

Total loss recognized = $1,380

Explanation:

Given:

Value of note receivable = $40,000

Rate of interest = 6% = 0.06

Date of discount = September 30, 2016

Discount rate = 10% = 0.10

Discount period = 9 months  / 12 = 0.75

Computation of maturity value:

Maturity value = $40,000 + ($40,000 × 0.06)

Maturity value  = $40,000 + $2400

Maturity value  = $42,400

Computation of amount received on discount from bank:

Amount received on discount from bank = Maturity Value - (Maturity Value × Discount rate × Discount Period)

= $42,400 - ($42,400 × 0.10 × 0.75)

= $42,400 - $3,180

Amount received on discount from bank = $39,220

Value of note at the time of Discount = $40,000 + ($40,000 ×0.06 × {1-0.75})

= $40,000 + $600

Value of note at the time of Discount = $40,600

Total loss recognized = Value of note at the time of Discount - Amount received on discount from bank

Total loss recognized = $40600 - $39220

Total loss recognized = $1,380

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hi,

henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi