When a business is holding a note receivable and wishes to collect cash prior to the maturity date of the note,the business may sell the note to a bank or a financial broker.This process is called discounting a note.

Question

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Discounting a note involves selling the note to a bank or financial broker at a discount in order to receive cash prior to the maturity date of the note.

When a Business Is Holding a Note Receivable and Wishes