Answered: Please clarify the difference between…

Please clarify the difference between the stated interest rate on notes receivable and the market interest rate, as well as premiums and discounts...? I'm stumped as to why that notion is eluding me.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter17: Accounting For Notes And Interest

Section: Chapter Questions

Problem 14RQ

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Please clarify the difference between the stated interest rate on notes receivable and the market interest rate, as well as premiums and discounts...? I'm stumped as to why that notion is eluding me.

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Can someone please, in plain English, explain the difference between notes receivable stated rate and market rate, premiums and discounts...?I I don't know why that concept is going over my head..
Which of the following is false about the discount on short-term notes payable? The Discount on Notes Payable account has a debit balance. The Discount on Notes Payable account should be reported as an asset on the balance sheet. If there is a discount on notes payable, the effective interest rate is higher than the stated discount rate. All of these are true
What is the impact of changes in interest rates on the accounting for variable-rate promissory notes?
Which of the following is not true about the discount on short-term notes payable? a. The Discount on Notes Payable account should be reported as an asset on the balance sheet. b. When there is a discount on a note payable, the effective interest rate is higher than the stated discount rate. c.The Discount on Notes Payable account has a debit balance. d. Discount on Notes Payable is a contra account to Notes Payable.
TRUE OR FALSE: An implicit or imputed rate of interest must be used when long-term notes are issued at a stated rate of interest that is materially different from the market rate of interest.
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When assessing credit losses on estimated uncollectible notes receivable, the discounted cash flow technique is often used, discounting at the current interest rate in effect when the credit loss is estimated or re-estimated. True or False True False
Which of the following statements is correct? If the note is issued at a discount, the interest income to be recognized every period is a. Either higher or lower than the amount of cash received for interest depending on the amount of the discount b. Equal to the amount of cash received for interest c. Lower than the amount of cash received for interest d.
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