Interest on receivables and payables;

              Interest on Receivables and Payables
CONTENTS Paragraph
Numbers
Introduction 1-5
Problem 1
Applicability 2-5
Discussion 6-10
Note received or issued for cash 6
Unstated rights or privileges 7
Note received or issued in a noncash transaction 8
Determining present value 9-10
Opinion 11-16
Note exchanged for cash 11
Note exchanged for property, goods, or service 12
Determining an appropriate interest rate 13-14
Amortization of discount and premium 15
Statement presentation of discount and premium 16
Effective Date 17
Appendix 18-20
Present value concepts 18-19
Illustrations of balance sheet presentation of notes
which are discounted 20
Issued by the Accounting Principles Board of the American Institute of Certified Public Accountants
COPYRIGHT 1971 BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS, INC. 666 FIFTH AVENUE. NEW YORK, NEW YORK 10019
OPINIONS OF THE ACCOUNTING PRINCIPLES BOARD
AUGUST 1971
21