Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 14-7 different from the current cash price of the consideration or the current market value of the debt. In these circumstances, the present value of the debt instrument is measured by the imputed interest rate. 21. The imputed interest rate used for valuation purposes will normally be at least equal to the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction. The object is to approximate the rate that would have resulted if an independent borrower and an independent lender had negotiated a similar transaction under comparable terms and conditions. Any difference between the cash received and the discounted amount (fair value of the loan) is recognized in net income unless it qualifies for recognition as some other asset or liability. 22. Mortgage notesare a common means of financing the acquisition of property, plant, and
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