Asked by Janiel Samuels on May 01, 2024
Verified
When an interest-bearing note matures the balance in the Notes Payable account is
A) less than the total amount repaid by the borrower.
B) the difference between the maturity value of the note and the face value of the note.
C) equal to the total amount repaid by the borrower.
D) greater than the total amount repaid by the borrower.
Notes Payable
Written promises to pay a specified amount of money, typically with interest, by a certain date.
Maturity Value
The total amount that will be paid to the investor at the end of a fixed income security's term, including principal and interest.
- Comprehend the principles of accounting and the financial reporting requirements for notes payable and interest-bearing notes.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
A
Explanation :
When an interest-bearing note matures, the balance in the Notes Payable account represents the principal amount borrowed. The total amount repaid by the borrower includes both this principal and the accrued interest, making the repayment amount greater than the Notes Payable balance.
Learning Objectives
- Comprehend the principles of accounting and the financial reporting requirements for notes payable and interest-bearing notes.