Notes Receivable Flashcards
Claims supported by formal promises to pay usually in the form of notes.
NOTES RECEIVABLE
Notes receivables represents only claims arising from…
Sale of Merchandise
or
Service in the Ordinary Course of Business
Short-Term notes receivables shall be measured at…
FACE VALUE
Interest-bearing notes receivable shall be measured at…
FACE VALUE which is actually the present value upon issuance.
Noninterest-bearing notes receivable shall be measured at…
PRESENT VALUE, which is the discounted value of the future cash flows using the EFFECTIVE INTEREST RATE.
Subsequent Measurement of Long-term notes receivables shall be measured at…
AMORTIZED COST using the effective interest method.
For long-term noninterest-bearing notes receivable, the amortized cost is the…
Present value plus the amortization of the discount, or the Face value minus the unamortized unearned interest income.
For long-term noninterest-bearing notes receivable, the amortized cost is the…
Present value plus the amortization of the discount, or the Face value minus the unamortized unearned interest income.
Coupon Rate is also the
Stated or Nominal Rate
Effective Rate is also the…
Market or Discount Rate
Unreasonably Low interest or no interest means…
Present Value = Discounted Value
Subsequently, Notes Receivables are measured at…
Amortized Cost using the effective interest method.
