Candleton borrowed cash, signing a two-year, interest-bearing note payable with a face value of $8,000 and an

Question:

Candleton borrowed cash, signing a two-year, interest-bearing note payable with a face value of $8,000 and an effective interest rate of 8 percent. Interest payments on the note are made annually.

Provide the journal entire’s that would be recorded over the life of the note, assuming the following stated interest rates:

(a) 8 percent

(b) 0 percent

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...