Use the Following Information for Questions

question 98

Multiple Choice

Use the following information for questions.
On January 1, 2011, in an effort to lure Tar-Mart, a major discount retail chain to the area, the city of Bordeaux agreed to provide the company with a €6,000,000 three-year, Zero-interest bearing note.The prevailing rate of interest for a loan of this type is 10% and the present value of €6,000,000 at 10% for three years is €4,507,800.
-In recording the loan and grant, Tar-Mart will

• A)debit Discount on Notes Payable of €1,492,200.
• B)credit Deferred Grant Revenue €1,492,200.
• C)credit Note Payable €6,000,000.
• D)all of these.

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Definitions:

Offer

A proposal presented by one party to another as a basis for negotiations or forming a contract.

Legal Liability

Refers to being legally responsible for damages or enforcement actions, arising out of one's actions or omissions under the law.

Offer

A proposal presented by one party to another as a basis for negotiation, intending to create a binding legal agreement upon acceptance.

Interim Agreement

A binding contract that will subsequently be put into a more formal document; usually referred to as an agreement of purchase and sale in a real estate transaction.