When a Note Payable Is Issued for Property, Goods, or Services

question 62

Multiple Choice

When a note payable is issued for property, goods, or services, the present value of the note may be measured by

• A)the fair value of the property, goods, or services.
• B)the fair value of the note.
• C)using an imputed interest rate to discount all future payments on the note.
• D)All of these answer choices are correct.

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Definitions:

Rent Expense

The cost incurred by a business to utilize property or equipment for operational purposes over a certain period.

Adjusting Entry

A log entry prepared at the termination of an accounting interval to apportion profits and outlays to the timeframe in which they really happened.

Unearned Rent Revenue

Income received by a company for rent that has not yet been earned because the rental period has not occurred.