Which of the following is the primary effect of amortizing a discount on notes receivable?
A) It increases the interest revenue so that the corporation's effective rate of return is brought up to the higher market rate.
B) It reduces the discount and increases the carrying value of the note receivable until the carrying value is equal to the face value of the note.
C) Both A and B are the primary effects of amortizing a discount.
D) None of the above are accurate.
Correct Answer:
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