| Posted: 21 Sep 2009 at 19:08 | IP Logged
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On October 1, 2005, Fleur Retailers signed a 4-month, 16% note payable
to finance the purchase of holiday merchandise. At that date, there was
no direct method of pricing the merchandise, and the note's market rate
of interest was 11%. Fleur recorded the purchase at
the note's face amount. All of the merchandise was sold by December 1,
2005. Fleur's 2005 financial statements reported interest payable and
interest expense on the note for three months at 16%. All amounts due
on the note were paid February 1, 2006.
Fleur's 2005 cost of goods sold for the holiday merchandise was ans =
Understated by the difference between the note's face amount and the note's October 1, 2005 present value. .......... can any one plz explain it to me.
__________________
01/24/09 - REG - 91
02/28/09 - BEC - 85
10/19/09 - FAR - 86
02/01/10 - AUD - 88 :):)
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Topic: short term Notes payable
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