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On April 20 the business accepted the ABC Company's $1,080 note in payment of their account receivable balance. The note was at 8% for 60 days. [Assume a 360-day year in your calculations for interest amounts.]
1. If the note was discounted at the bank on May 5, how many days in the discount period?
2. If the note was discounted at the bank on May 5 at 7%, what amount would be debited to the Cash account in the entry (the proceeds)?
3. If the note was discounted at the bank on May 5 at 7%, what amount would be credited to the Interest Income account in the entry?
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