The carrying value of a long-term note payable is computed as:
A)The future value of all remaining payments,using the market rate of interest.
B)The face value of the long-term note less the total of all future interest payments.
C)The present value of all remaining payments,discounted using the market rate of interest at the time of issuance.
D)The present value of all remaining interest payments,discounted using the note's rate of interest.
E)The face value of the long-term note plus the total of all future interest payments.

Question

Quizplus · Accepted Answer

The carrying value of a long-term note payable is the present value of all the remaining payments, which are discounted using the market rate of interest at the time of issuance. This is because the carrying value represents the amount that would be needed to pay off the note immediately.

The Carrying Value of a Long-Term Note Payable Is Computed