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Discuss interest rates for various types of loans

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Why would a company issue notes payable for something other than cash at the current rate?

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Solution Summary

There were two possible solutions to the question as stated. The first dealt with secured versus unsecured loans, and the second solution discussed why some loans are at rates higher than current market rates.

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I just realized that the question may mean two different things.

First, it could mean that a note payable would normally arise this way:
Debit Cash
Credit Note payable
This kind of transaction could be a line of credit, an operating loan, a working ...

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