Statement 1: A notes payable wherein its fair value exceeded its face amount can tell us that it was issued at a premium. Statement 2: The discount on notes payable value initially recognized of a non-interest bearing note is the total amount of the interest expense to be recognize over the term of the note. Statement 3: Amortization of premium on notes payable increases the carrying value of notes. Statement 4: The fair value of an interest bearing note with realistic interest rates is the same to its face value. All statements are not correct. Only one statement is wrong. Only one statement is correct. None of the statements is wrong.
Statement 1: A notes payable wherein its fair value exceeded its face amount can tell us that it was issued at a premium. Statement 2: The discount on notes payable value initially recognized of a non-interest bearing note is the total amount of the interest expense to be recognize over the term of the note. Statement 3: Amortization of premium on notes payable increases the carrying value of notes. Statement 4: The fair value of an interest bearing note with realistic interest rates is the same to its face value. All statements are not correct. Only one statement is wrong. Only one statement is correct. None of the statements is wrong.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Statement 1: A notes payable wherein its fair value exceeded its face amount can tell us that it was issued at a premium.
Statement 2: The discount on notes payable value initially recognized of a non-interest bearing note is the total amount of the interest expense to be recognize over the term of the note.
Statement 3: Amortization of premium on notes payable increases the carrying value of notes.
Statement 4: The fair value of an interest bearing note with realistic interest rates is the same to its face value.
Statement 2: The discount on notes payable value initially recognized of a non-interest bearing note is the total amount of the interest expense to be recognize over the term of the note.
Statement 3: Amortization of premium on notes payable increases the carrying value of notes.
Statement 4: The fair value of an interest bearing note with realistic interest rates is the same to its face value.
All statements are not correct.
Only one statement is wrong.
Only one statement is correct.
None of the statements is wrong.
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