AMC Issues a Note in Exchange for a Machine with No

question 121

Multiple Choice

AMC issues a note in exchange for a machine with no stated interest rate. In accounting for the transaction:

• A)The machine should be depreciated over the note's term to maturity.
• B)If fair values of the note and machine are unavailable, the note should be recorded at its present value, discounted at the market rate of interest.
• C)Both the note and machine are recorded at the face amount of the note or the fair value of the machine, whichever is more clearly determinable.
• D)The note is recorded at its face amount unless the fair value of the machine is readily available.

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Definitions:

Minor Term

In syllogistic logic, the term that appears in the conclusion as the subject and is a specific instance within the general category of the major term.

Middle Term

In a syllogism, the term that appears in both premises but not in the conclusion, serving as a link between the two other terms.

Family-Oriented Television

TV programming designed to be suitable and appealing to all family members, often focusing on family values.

Animated Television

Television content produced by creating sequential drawings or models to give the illusion of movement.