On January 1, a 3-year, $8,000, non-interest-bearing note payable was issued when the market rate of interest was 11%. To determine the amount at which the note will be valued on the balance sheet on the issue date, use the

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The note is a non-interest-bearing note, which means the interest cost is embedded in the note's face value. To determine its value on the balance sheet at issuance, the present value of the note's future payment (the face value) needs to be calculated using the market rate of interest. The present value of $1 table is used for this purpose, as it provides the factor to discount a single future payment back to its present value at a given interest rate over a specific period of time.

On January 1, a 3-Year, $8,000, Non-Interest-Bearing Note Payable Was