How is a zero-interest-bearing note different from a traditional note or bond?

1. Under what conditions would a company not consider a stated interest rate to be fair?
2. If the stated interest rate is considered unreasonable or not given, how would a company determine the amount of interest and the interest rate to use in recording the debt?
3. What is a mortgage note payable? What are differences between mortgage notes and the other notes we have seen so far?

 

Reporting and Analyzing Liabilities

 

1. Define off-balance-sheet financing. Why would companies engage in off-balance-sheet financing?
2. What details about long-term debt are reported in the footnotes of the financial statements?

 

Short-Term Notes Payable 

 

1. What is different between accounting for short-term and long-term notes payable (both regular and zero-interest-bearing)?

Answer rating: 100% (QA)

a A zerointerestbearing note is different from a traditional note or bond in that it does not pay any interest to the lender Instead the lender receives a higher face value at maturity than the amount ... View the full answer