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Unformatted text preview: . disc., 1/2/02 (3%*$900,000)
Unamortized Disc, 1/2/07
2) Original issue costs, 1/2/02
*[($14,400/10)*5] J/E- 1/2/07:
909,000 $ 27,000 $
13,500 $ 14,400 $
7,200 Long Term Notes Payable
*Notes issued for property, goods, or services
*Stated rate ona N/P os assumed to be fair UNLESS:
1) No rate is stated, or
2) Stated rate appears unreasonable, or
3) The FV of what was received (property, goods, services, etc.) is materially different from the
face amount of the note
If the stated rate on N/P is unfair:
1) Recored what was received at its FMV; the PV of the note is measured based on this FMV
EX: N/P of $100,000 with a stated interest rate of 3% is issued for land with a FMV of
2) If FMV is unknown, impute an interest rate.
Record what was rec'd at PV of the payments, using the imputed rate
EX: A non interest bearing $100,000 note payable...
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- Spring '11