Hafers, an electrical supply company, sold $3,800 of equipment to Jim Coates Wiring, Inc. Coates signed a promissory note May 12 with 4.00% interest. The due date was August 18. Short of funds, Hafers contacted Charter One Bank on July 12; the bank agreed to take over the note at a 5.40% discount.

What are the proceeds?

To determine the proceeds, we need to calculate the discount amount first. The discount amount is the difference between the original amount of the promissory note and the amount the bank agreed to pay for it.

Step 1: Calculate the original amount:
The original amount of the promissory note is $3,800.

Step 2: Calculate the discount amount:
The bank agreed to take over the note at a 5.40% discount. To find the discount amount, we need to calculate 5.40% of $3,800.

Discount amount = 5.40% * $3,800

Step 3: Calculate the proceeds:
To find the proceeds, we subtract the discount amount from the original amount.

Proceeds = Original amount - Discount amount

Now, let's calculate the discount amount:

Discount amount = 5.40% * $3,800
= 0.054 * $3,800
= $205.20

Finally, let's calculate the proceeds:

Proceeds = $3,800 - $205.20
= $3,594.80

Therefore, the proceeds from the sale of the promissory note are $3,594.80.

To find the proceeds, we need to calculate the discount amount and subtract it from the original amount of the promissory note.

First, let's calculate the discount amount. The discount rate agreed upon by Hafers and Charter One Bank is 5.40%. To calculate the discount amount, multiply the original amount of equipment sold ($3,800) by the discount rate (5.40% expressed as a decimal):

Discount amount = $3,800 * (5.40/100)
Discount amount = $205.20

Next, subtract the discount amount from the original amount of the promissory note to get the proceeds:

Proceeds = Original amount of equipment sold - Discount amount
Proceeds = $3,800 - $205.20
Proceeds = $3,594.80

Therefore, the proceeds from the sale of the promissory note to Charter One Bank is $3,594.80.