What does discounting a note mean?
What does discounting a note mean? Discounting means selling or pledging a customer's notes receivable to the bank at some point prior to the note's maturity date. The term “discount” is used because the bank deducts the interest it charges from the note's maturity value and thus discounts the note. The note is usually discounted with recourse. How do you discount a note payable? Definition: A discount on notes payable occurs when the note's face value is greater than its carrying value. The difference between the greater face value and the lesser carrying value is considered the discount. It represents...