A non-interest-bearing note was recorded in the accounting records. The book value of the note
A)remains the same during the maturity period.
B)decreases during the maturity period.
C)increases throughout the maturity period.
D)is reported on income statement.

Question

Quizplus · Accepted Answer

Non-interest-bearing notes are recorded at a discount, and their book value increases over time as the discount is amortized up to the face value of the note by the maturity date.

A Non-Interest-Bearing Note Was Recorded in the Accounting Records