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Flashcards in Mod 13A Wrong Answers Deck (8):
0

What should be used to record the amount of the purchased machine, where a one time lump sum payment is made, assuming a 10% interest rate?

Cost of machine x present value of $1

1

In recording the transaction recognition where a note receivable is issued with a related merchandise discount, what should be recorded?

Discount on note receivable should be recorded

Deferred charge should be recorded

2

The total interest revenue earned over the life of the note equals...

The excess of cash received over the cash paid to acquire the
Note

3

Discount on notes payable, classification

Liability valuation account

4

Discount on notes payable should be recorded on the balance sheet as...

A direct reduction from the face amount of the note

5

A premium on notes payable would be reported on the balance sheet as...

An addition to face amount on the note

6

The discount on notes receivable is not a Deferred credit separate form the note because it is...

A debit

7

When a note is issued with a stated rate of 8% below the market rate of 10%, the note will be issued...

At a discount