A 60-day, 12% note for $7,000, dated April 15, is received from a customer on account. The face value of the note is
A) $6,860
B) $7,140
C) $7,840
D) $7,000

Question

Quizplus · Accepted Answer

The face value of a note refers to the principal amount or the original amount before any interest is added. In this case, the original amount is $7,000, which is the face value of the note. Interest calculations are separate and would be added to the face value for the total amount due at maturity.

A 60-Day, 12% Note for $7,000, Dated April 15, Is