When a Company Issues a Long-Term Non-Interest-Bearing Note Payable in Exchange

question 116

Multiple Choice

When a company issues a long-term non-interest-bearing note payable in exchange for cash and special rights, the difference between the cash proceeds and the present value of the note is recorded as

• A)premium on bonds payable
• B)unearned revenue
• C)interest expense
• D)extraordinary loss

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Definitions:

Poisson Distribution

A discrete frequency distribution which gives the probability of a number of independent events occurring in a fixed time.

Mean

The arithmetic average of a set of numbers, found by dividing the sum of all numbers by the count of numbers.

Discrete Probability Distribution

A statistical function that describes the likelihood of each possible outcome of a discrete random variable occurring.

Mean

The average of a set of values, calculated by summing all the values and dividing by the number of values.