The face value of a noninterest-bearing note less the discount on notes payable is called the ________ of the note.
A)contra value
B)market value
C)interest value
D)carrying value

Question

Quizplus · Accepted Answer

The carrying value of a noninterest-bearing note is the face value minus the discount on notes payable. This is because the discount represents the interest expense that is being amortized over the life of the note, and reduces the face value to arrive at the carrying value. Therefore, the correct answer is D) carrying value.

The Face Value of a Noninterest-Bearing Note Less the Discount