Q Company borrows $35,000 on a one-year, non-interest-bearing note. At that time, Q receives $31,500. The going market rate of interest is 10%. At the maturity date, Q will pay the lender

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The company will pay the lender $35,000 at the maturity date, which is the face value of the non-interest-bearing note. The difference between the amount received ($31,500) and the face value ($35,000) represents the interest implied by the discounted note, calculated based on the market rate of interest.

Q Company Borrows $35,000 on a One-Year, Non-Interest-Bearing Note