short term debt problem
Question # 00047817
Posted By:
Updated on: 02/10/2015 03:17 PM Due on: 02/14/2015
Assume that your team is in business and you must borrow $6000 cash for short-term needs. You have been shopping banks for a loan, and you have the following two options.
A. Sign a $6,000 90 day, 10%interest-bearing note dated June 1
B. Sign a $6,000, 120 day, 8% interest-bearing note dated June 1
Problem
1. Discuss the two options and determine the best choice and rationale for choice.
2. Prepare journal entry for option A - at date of issuance
A. Sign a $6,000 90 day, 10%interest-bearing note dated June 1
B. Sign a $6,000, 120 day, 8% interest-bearing note dated June 1
Problem
1. Discuss the two options and determine the best choice and rationale for choice.
2. Prepare journal entry for option A - at date of issuance
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Rating:
/5
Solution: short term debt problem