On January 1, YR01, Honda Inc. issued a two-year $1,000 note payable. The note bears interest...
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On January 1, YR01, Honda Inc. issued a two-year $1,000 note payable. The note bears interest of 4% paid yearly each December 31st and matures on December 31, YR02. At the date the note was issued, the market rate for similar notes payable was 8% and the note is properly classified as a long-term liability. What is the present value of the note payable at the issue date of January 1, YR01 (assume an annual discounting period and round to the nearest penny)? Assume the correct present value for the note payable in question above was $860.00 at January 1, YR01, and Honda Inc. used straight-line amortization for any discount or premium. What would be the total interest expense recorded for the year ended December 31, YR02 (round to the nearest penny)? On January 1, YR01, Honda Inc. issued a two-year $1,000 note payable. The note bears interest of 4% paid yearly each December 31st and matures on December 31, YR02. At the date the note was issued, the market rate for similar notes payable was 8% and the note is properly classified as a long-term liability. What is the present value of the note payable at the issue date of January 1, YR01 (assume an annual discounting period and round to the nearest penny)? Assume the correct present value for the note payable in question above was $860.00 at January 1, YR01, and Honda Inc. used straight-line amortization for any discount or premium. What would be the total interest expense recorded for the year ended December 31, YR02 (round to the nearest penny)?
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Present Value of the Note Payable Given Face value of the note payable1000 Interest rate4 per year M... View the full answer
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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