When a borrower receives the face amount of a discounted note less the discount,the amount is known as
A)the note proceeds
B)the note discount
C)the note deferred interest
D)the note principal

Question

Quizplus · Accepted Answer

The note proceeds refer to the actual amount received by the borrower after deducting the discount from the face value of the discounted note. So, option A is the correct answer. Option B is incorrect as note discount refers to the amount of the discount itself. Option C is incorrect as deferred interest is the amount of interest that accrues but is not paid until some future date. Option D is incorrect as note principal refers to the face value of the discounted note before deducting any discounts.

When a Borrower Receives the Face Amount of a Discounted