1. Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the interest in advance. Is 10% the ‘‘real’’ rate of interest that you will pay? How can the true interest rate be...

1. Assume that your local bank gives you a $1,000 loan at 10% per year but deducts the interest in advance. Is 10% the ‘‘real’’ rate of interest that you will pay? How can the true interest rate be calculated?

2. Is the account Discount on Notes Payable an income statement or a balance sheet account? Does it have a debit or credit balance?