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29.When a note is non-interest-bearing, the maturity value equals the _____.
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- 32.The time period between the date a note is discounted and the maturity date is called the _____ period. a.discount b.term c.exact d.growthExplain the initial measurement of,a. short-term notes receivableb. interest bearing long-term notesc. noninterest bearing note receivabled. interest bearing below market rate long-term notesShort-term non-interest-bearing notes receivable are usually recorded at their a. present value b. net realizable value c. principal value d. maturity value
- 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.Which 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.Principal plus interest equals ______ of a note. (a) discount (b) net proceeds (c) interest rate (d) maturity value
- 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.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.Under the effective interest method of interest bearing note in lump-sum payment, the interest to be paid is equal to A. the effective (yield) rate of interest multiplied by the face of the note. B. the effective rate multiplied by the beginning of the period carrying amount of the note. C. the stated rate multiplied by the beginning of the period carrying amount of the note. D. the stated (nominal) rate of interest multiplied by the face of the note.
- 31.The actual interest rate charged on a discounted note is called the _____ interest rate. a.effective b.discount c.simple d.ordinaryCredit risk refers to: Question 10 options: Risk from reclassification of the creditworthiness of the borrower Risk from a change to the interest rate on a loan Risk of a change to the repayment schedule of a loan Risk of a change to the maturity of a credit(43) If a bond is retired before maturity, the journal entry to record the retirement by the issuer will include a credit to Cash. True or False