Describe the Valuation of Installment Notes.
Describe the Valuation of Installment Notes.
Installment notes can be defined as a promissory note for the payment of principal and interest amount after some specific interval of periods. It works as a payment plan for a loan.
Installment note schedules the payment to be made by the borrower to the lender in equal payment amount which includes principal as well as interest amount. This amount once paid is then reduced from the amount of loan and its interest. Payments are made in an equal amount either annually, semi-annually, or quarterly. The period to repay the long term liability varies according to the note. Resulting in full payment of loan after all the payments of installment. A best suitable example of an installment note is a car loan or home loan.
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