Reference no: EM132428742

Questions -

Q1) When the stated rate and market rate of a note receivable are the same,

a. the note's face value would be different.

b. it must be a zero-interest-bearing note.

c. the note's face value would be indeterminable.

d. the note's face value and fair value would be the same

Q2) On December 31, 2020, Flint Corporation sold for $100,000 an old machine having an original cost of $180,000 and a book value of $80,000. The terms of the sale were as follows:

$20,000 down payment,

$40,000 payable on December 31 each of the next two years.

The agreement of sale made no mention of interest; however, 9% would be a fair rate for this type of transaction. What should be the amount of the notes receivable net of the unamortized discount on December 31, 2020 rounded to the nearest dollar?

a. $90,364

b. $80,000

c. $140,728

d. $70,364

Q3) Cookie Ltd. receives a four-year, $100,000, zero-interest-bearing note. The present value of this note is $82,270. What is the implicit rate of interest?

a. 9%

b. 7%

c. 3%

d. 5%