When a borrower receives the face amount of a discounted note less the discount, the amount received 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 amount received by the borrower when a discounted note is issued is known as the note proceeds. This amount is calculated as the face value of the note, minus the discount. Therefore, option A is the correct answer. Option B refers to the amount of the discount, not the amount received. Option C is not a commonly used term in relation to discounted notes. Option D refers to the face value of the note, not the amount received after the discount is applied.

When a Borrower Receives the Face Amount of a Discounted