When a borrower receives the face amount of a discounted note less the discount, the amount is known as the
A) note proceeds
B) note discount
C) note deferred interest
D) note principal

Question

Quizplus · Accepted Answer

The face amount of a discounted note less the discount is known as the note proceeds. This is the amount that the borrower receives from the lender after the lender has deducted the discount. The note proceeds represent the actual amount of money that the borrower will receive and is usually less than the face amount of the note. Therefore, the correct answer is A) note proceeds.

When a Borrower Receives the Face Amount of a Discounted