When a note is issued in exchange for a machine, and interest on the note is not stated:

Multiple Choice

• The machine should be depreciated over the term to maturity of the note.

• The note should be recorded at its present value, discounted at an appropriate market rate of interest, if fair values of the note and machine are unavailable.

• 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.

• The note is recorded at its face amount unless the fair market value of the machine is readily available.