Question

To determine the amount at which a zero-interest bearing note should be recorded, all of the following must be known except

a.the term of the note.
b.the face amount of the note.
c.the effective interest rate of the note.
d.the fair value of the note.

Answer 1

To determine the amount at which a zero-interest bearing note should be recorded, the term, face amount, and effective interest rate are needed, except for the fair value of the note.

Step-by-step explanation:

To determine the amount at which a zero-interest bearing note should be recorded, all of the following must be known except:

1. The term of the note
2. The face amount of the note
3. The effective interest rate of the note

Knowing the term, face amount, and effective interest rate of a zero-interest bearing note is essential in determining its recording amount. The fair value of the note, however, is not required for this calculation.