Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:Ann Demas loaned $230,896 to Joe Smith on January 1, 2020. A zero-interest-bearing note (face amount, $275,000) was exchanged solely
for cash; no other rights or privileges were exchanged. The note is to be repaid in three years on December 31, 2022. The prevailing rate of
interest for a loan of this type is 6%. The present value of $275,000 at 6% for three years is $230,896. At December 31, 2021, the balance of
of the Discount on Note Payable account would be(round to whole dollars)
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