Asked by Elizabeth Barkhudaryan on May 04, 2024
Verified
Long-term notes may have
A) fixed rates of interest only.
B) floating interest rates only.
C) no interest rates.
D) fixed or floating interest rates.
Long-Term Notes
Debt securities with a maturity date longer than one year, representing borrowed funds that need to be repaid.
Fixed Rates
Interest rates that remain constant over the lifetime of a financial instrument, unaffected by market fluctuations.
Floating Interest
An interest rate that changes over the life of a loan or mortgage, based on the current market conditions or an index.
- Distinguish among different categories of liabilities and their treatment in accounting, focusing on long-term notes and bonds.
Verified Answer
RR
rajavel ramaiyanMay 11, 2024
Final Answer :
D
Explanation :
Long-term notes can have either fixed or floating interest rates, depending on the terms agreed upon by the lender and borrower. Fixed rates remain the same throughout the term, while floating rates can change based on specified factors.
Learning Objectives
- Distinguish among different categories of liabilities and their treatment in accounting, focusing on long-term notes and bonds.