True or false When a non-interest-bearing note has been issued at a discount or premium and is fully amortized, on maturity date, the note is not equal to its face value.
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- The interest on a non-interest bearing note is equal to a. The excess of the face value over the present value. b. The excess of the present value over the face value. c. The excess of the present value over the market value of the note. d. Zero.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.A long-term note payable with no stated rate of interest should be reported separately from other short-term notes payable recorded at the face value discounted to its present value recorded at maturity value
- Short-term non-interest-bearing notes receivable are usually recorded at their a. present value b. net realizable value c. principal value d. maturity valueStatement 1: If the nominal rate of the notes is greater than the effective rate of interest, the fair value of the notes is also greater than its face value.Statement 2: In amortizing the discount of non-interest bearing notes, the amount of discount amortized for the period is also the value of interest expense to be recognized for the period. a.True, True b.False, False c.False, True Td.rue, FalseNotes receivable should be stated at amortized cost which is equivalent to its present value which may be its face or discounted value for long term interest bearing and or long term interest bearing with unreasonably low interest rate. TRUE OR FALSE
- When the market interest rate on a short-term note receivable is greater than the stated rate, ________. Group of answer choices the present value of the note is greater than its stated value the stated value of the note is greater than its face value the stated value of the note is less than its face value the present value of the note is less than its face valueWhich of the following is true? Short-term notes payable should be discounted at its present value, more so, if it constitutes a financing transaction and the imputed interest can be measured without undue cost or effort. Transaction costs of issuing financial liabilities are expensed outright. The present value of a serial note's principal is computed by using the PV of 1 as the present value factor. Notes payable are obligations supported by creditor's promissory notes.Which of the following is true of a maturity date? A. It must be calculated in days, not in months or years. B. It is the date when principal and interest on a note are to be repaid to the lender. C. It is the date of establishment of note terms between a lender and customer. D. It is not a characteristic of a note receivable.
- The difference between the maturity value of a note and the net proceeds is called discounting.What is a key difference between a short-term note payable and a current portion of a noncurrent note payable?When bonds are redeemed before maturity, how is the gain or loss on redemption determined? Why does the calculation differ for bonds issued at face value, at a premium, and at a discount?
