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How Should Interest Expense on a Non-Interest-Bearing Note Be Determined

Question 25

Multiple Choice

How should interest expense on a non-interest-bearing note be determined?


A) There is no interest expense on a non-interest-bearing note
B) By dividing the discount on the note by the number of years till maturity
C) By multiplying the face amount of the note times the market rate of interest
D) By multiplying the carrying value of the note times the market rate of interest

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