True or false 1. Amortization of the discount on note Payable increases the balance of the discount on note payable 2. The carrying amount of the note payable is the same all through out the term of an non-interest bearing note. 3. Discount on note payable is amortized by crediting it and debiting interest expense. 4 To record the purchase of a property by issuing a non-interest bearing note will involve a credit to note payable . 5.. When an interest bearing note is issued to acquire an asset, the asset is debited at an amount equal to the downpayment if there is any plus the face amount of the note. 6. The property that is purchased using a non-interest bearing note should be recorded at its cash price if available. If the cash price of the property is not available, the present value of the note must be computed. Please answer it completely. Thanks tutor.

True or false 1. Amortization of the discount on note Payable increases the balance of the discount on note payable 2. The carrying amount of the note payable is the same all through out the term of an non-interest bearing note. 3. Discount on note payable is amortized by crediting it and debiting interest expense. 4 To record the purchase of a property by issuing a non-interest bearing note will involve a credit to note payable . 5.. When an interest bearing note is issued to acquire an asset, the asset is debited at an amount equal to the downpayment if there is any plus the face amount of the note. 6. The property that is purchased using a non-interest bearing note should be recorded at its cash price if available. If the cash price of the property is not available, the present value of the note must be computed. Please answer it completely. Thanks tutor.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 15Q: What business circumstance could produce a short-term notes payable created from a loan?

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Similar questions

True or false 1. The trend of the balance of the discount on note payable during the term of the non-interest bearing note is decreasing. 2. The note payable account will be credited at its present value upon acquisition of a property if the note issued was non-interest bearing. 3. The carrying amount of the note payable is the same all through out the term of an interest bearing note .
At the maturity of a note payable, a borrower will pay ________. A. the interest amount only B. the principal plus interest C. the principal amount only D. the principal minus interest
26) The cash payment or PMT for a Note Payable (installment loan) includes only interest on the loan. TRUE FALSE
6. When unspecified receivables are used to secure for a loan, which accounting treatment is required? Only a note to financial statement is required The borrower notifies the debtor that their receivables were assigned the borrower should not notify the debtor that their receivables were assigned Notify the debtor that their receivable was sold
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.
60. If the face value of a notes receivable is greater than its present value, which would most likely appear in the journal entry in the amortization? a. Cr. Premium on Notes Receivable b. Dr. Discount on Notes Receivable c. Dr. Premium on Notes Receivable d. Cr. Discount on Notes Receivable
IA-Receivable Financing 3. Identification. If the proceeds from discounting is less than the carrying value of the Notes Receivable, an interest expense is recorded. This refers to what type of discounting with recourse?
8. When specified receivables are used to secure for a loan on a notification basis, which accounting treatment is required? Only a note to financial statement is required The borrower notifies the debtor that their receivables were assigned the borrower should not notify the debtor that their receivables were assigned Notify the debtor that their receivable was sold
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.
QUESTION 1 The interest deducted in advance from the face valueof a non-interest bearing notes payable is/are called: a bankdiscount. proceeds. interest payable. interest receivable. QUESTION 2 The normal balance of the Notes Receivable accountis: credit. debit. nominal. income. QUESTION 3 When the due date of a note extends beyond one year, it becomes a:long-term liability. current liability. short-term liability.current asset. QUESTION 4 Mr. Robert signed a120 day, 10% note with First Federal State Bank for $12,000 onAugust 5th. What will be the maturity date of the note? December3rd December 4th November 30th December 2nd QUESTION 5 What will the maturity value of a note payable be if theprincipal is $15,000, the interest rate is 8%, and the term is 60days? $15,197.26 $14,802.74 $15,000 $197.26 QUESTION 6 Jacob borrowed $20,000 for 30 days at 5% from SkyBank.What will be the interest amount? $20,000 $82.19 $19,917.80$20,082.19 QUESTION 7 Match the terms incolumn I with the…
In the amortization of loans, interest must be paid at the beginning of each period calculated on the balance of the principal amount due (unpaid balance). TRUE OR FALSE?
When a borrower receives the face amount of a discounted note less the discount, the amount received is known as a.the note deferred interest b.the note principal c.the note proceeds d.the note discount