Question

on june 1, 2024, dirty harry company borrowed cash by issuing a 6-month noninterest-bearing note with a maturity value of $530,000 and a discount rate of 7%. assuming straight-line amortization of the discount, what is the carrying value of the note as of september 30, 2024?

Answer 1

The answer is $523,817.

What is Maturity Value?

The amount payable to the holder of financial liability at maturity is called the maturity value. The principal balance of a loan or bond is commonly referred to as this value.

Given:

Maturity Value = $530,000

Discount Rate = 7%

Computation of Carrying Values:

1. Less: Discount = $530,000*7%*6/12 = $18,550
2. Carrying value on 1 June = $530,000 - $18,550 = $511,450
3. Amortization on discount = $18,550*4/6 = $12,367
4. Carrying value on 30 September = $511,450 + $12,367 = $523,817

Therefore, the carrying value of the note as of September 30 is $523,817.

To learn more about the Maturity value and sums, click on the given link: https://brainly.com/question/9099365

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