A zero-interest-bearing note payable that is issued at a discount will not result in any interest expense being recognized.

Name: A zero-interest-bearing note payable that is issued at a discount will not result in any interest expense being recognized.
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Question

Quizplus · Accepted Answer

Although a zero-interest-bearing note is issued at a discount and does not explicitly charge interest, the discount is amortized over the life of the note, which is recognized as interest expense in the issuer's financial statements.

A Zero-Interest-Bearing Note Payable That Is Issued at a Discount