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#207 Sam Company had an interest-bearing note receivable in the face amount of $7,800. This...

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Accounting

#207

Sam Company had an interest-bearing note receivable in the face amount of $7,800. This note was created on March 1, Year 1, as the result of a $7,800 sales transaction by Sam. The note's interest rate and due date were 7% and February 1, Year 2, respectively. The principal and all of the interest are to be collected in full on the note's due date.

On September 1, Year 1, Sam found itself in need of cash and opted to discount this note at its bank on that date. Sam's banker agreed to discount the note on September 1, Year 1, using a discount rate of 8%. (Please show all work)

Q: How much Cash did Sam receive from its banker on September 1, Year 1, as a result of the discounting of this Note Receivable on that date?

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