When the federal government makes a direct loan

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When the federal government makes a direct loan at an interest rate below the prevailing Treasury rate (a subsidized loan), an asset should be recorded for which of the following amounts?

The face amount of the loan.

The present value of the future principal and interest payments discounted at the stated rate.

The present value of the future principal and interest payments discounted at the comparable Treasury rate.

No asset should be recorded

Reference no: EM131217278

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