Face interest rate accounting
Par value, in turn, is simply another term for the bond's face value, or the stated value of the bond at the time of issuance. A bond with a par value of $1,000 and a coupon rate of 6% pays $60 in interest each year. A bond's par value does not dictate its selling price. Face Interest Rate The interest rate listed on a loan agreement. The face interest rate may bear little relation to the interest actually paid because the face rate does not indicate how often interest compounds. The annual effective rate is a better measure of interest. However, for the sake of simplicity, some lenders may list the annual effective Your intermediate accounting textbook talks about three situations in which a company may issue a note receivable for other than face value: zero interest bearing, interest bearing, and notes for other than cash. They can be wild and wooly situations! Zero-interest-bearing notes These types of notes issue for the present value of the cash the […]