On june 8, williams company issued an $80,000, 5%, 120-day note payable to brown industries. assuming a 360-day year, what is the maturity value of the note?
a. $82,600
b. $84,000
c. $81,333
d. $88,200

To calculate the maturity of this note,

we use a simple formula first to get the interest which is:

I = Principal (amount owed) X Interest Rate (%) X Time (length of loan)

The days is only divided by only 360 days instead of 365 days. This is because commercial loans often use 360-day calendar years instead of 365-day calendar years. But not all banks used this as their calendar year,

I = Prt

= ($80000) (0.05) (120/360)

= ($80000) (0.01666666666)

I = $ 1,333.33

To get the maturity value, the formula is: M = Interest + Principal

M = I + P

= $1,333.33 + $80,000

= $81,333.33 or $81,333, letter C

is the answer

explanation:

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total