Why this is mistaken
Face is a contractual cash flow. Measure initial carrying amount from the economic exchange and supported yield, then reconcile discount or premium.
Where to watch
When this mistake may appear
- The note says $121,000.
- There is no stated interest.
Check your work
Your work may contain this mistake if:
- Records face at issuance without support.
- Calls a zero-coupon note interest-free.
- Has no present-value or exchange analysis.