5-A note receivable is issued with a face interest rate 4% less than the market rate.Which is a true statement?

A. A debit to note discount is created

B. A credit to note discount is created

C. The entry for the recordingactual note will reflect the discount

D. None of theabove

Question 6

A company accepted a 60 day note receivable in exchange for an outstandingaccounts receivable.Which of the following statements is true?

A- Normally, the note receivable will be recorded at its present value

B- Normally, the note receivable entry will reflect a discount or premium

C- Normally, the entry would simply be a debit to the note and credit the accounts receivable at the amount of the accounts receivable

D- None ofthe above

Question 7

Which of the following isnota trading security?

A- Investment in an equity security bought principally for sale in the near term

B- Investment in a debt security held for immediate resale

C- Investment in common stock originally acquired to obtain control that the company now intends to sell in a few months

D- Investment in common stock originally acquired to obtain control that is now held to have significant influence

Question 8

Factoring accounts receivable with recourse indicates that

A- the receivables were given as collateral for a loan

B- no cash discounts are available.

C- the buyer assumes the risk of bad debts.

D- payments for bad debts are guaranteed by the seller