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discount on notes payable

(Dictionary)

Author:
Harold Averkamp, CPA, MBA

Definition

A contra liability account arising when the proceeds of a note payable is less than the face amount of the note. The debit balance in this account will be amortized to interest expense over the life of the note.

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  • Debits and Credits
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
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  • Accounts Receivable and Bad Debts Expense
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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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