Recognition of notes receivable recognition of notes

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Unformatted text preview: trument Maker (lender) signs in favor of a Payee (borrower) Interest­bearing, either at a stated interest rate OR zero­interest­bearing (interest included in face value of note). Oh no, her comes time value of money. Chapter 7-38 LO 6 Explain accounting issues related to recognition of notes receivable. Notes Receivable Notes Receivable Notes Receivables originate from: Existing customers who need to extend payment period of an O/S receivable (conversion of A/R to N/R) High­risk or new customers (purchase our products with N/R to start since “may be” dirtbags) Loans to employees (often end up being dirtbags) and subsidiaries (Advanced Accounting) Sales of property, plant, and equipment Other lending transactions (majority of notes) Chapter 7-39 LO 6 Explain accounting issues related to recognition of notes receivable. Recognition of Notes Receivable Recognition of Notes Receivable Short-Term Long-Term Record at Face Value less allowance (same as A/R – NO TVM consideration here either) Record...
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