Notes Payable

Question 1

When notes are used to acquire non-monetary assets, at what amount do we record the Note and the Asset?

Answer 1

-FV of property or Note, whichever is more reliable

Question 2

When is the straight line method of amortization allowed?

Answer 2

-When not materially different from effective interest method

Question 3

What’s the difference between the gross and net methods of accounting for NP?

Answer 3

-Gross method uses two accounts while Net method uses one