On January 1, Harrison Enterprises borrowed $ 40,000 for three years. Harrison signed a noninterest-bearing note. Assuming

Question:

On January 1, Harrison Enterprises borrowed $ 40,000 for three years. Harrison signed a noninterest-bearing note. Assuming that the market rate of interest is 9 percent on the date the note is made and that interest is compounded annually, what is the of the note? What is the amount of interest expense shown on the budgeted income statement for the first two years? Describe the cash inflows and outflows Harrison must plan for with this note.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...