Foremost Company received from a customer a one-year, P500,000 note bearing annual interest of 8%. After holding the note for six months, the entity discounted the note at the bank at an effective...

Foremost Company received from a customer a one-year, P500,000 note bearing annual interest of 8%.

After holding the note for six months, the entity discounted the note at the bank at an effective interest rate of 10%.

1. What amount of cash was received from the bank?

 a. 540,000

 b. 523,810

 c. 513,000

 d. 459,238

2. What is the loss on note receivable discounting?

 a. 20,000

 b. 13,000

 c. 7,000

 d. 0