Blossom Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Blossom offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2025, a customer purchased a new $38,200 automobile, making a downpayment of $1,640. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Blossom required a $400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2026. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2028. Click here to view factor tables. (a) Your answer is partially correct. Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Cash Paid 400 Interest Expense 731 400 738 SA Change in Carrying Value of Note Carrying Value of Note 36560 331 36891 338 37229 400 745 345 37574 400 751 351 37925

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
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Blossom Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need
financing, Blossom offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion
will bring in some new buyers.
On January 1, 2025, a customer purchased a new $38,200 automobile, making a downpayment of $1,640. The customer signed a note
indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year,
Blossom required a $400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2026. After this one-year period,
the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2028.
Click here to view factor tables.
(a)
Your answer is partially correct.
Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548. Enter negative amounts using
either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Cash
Paid
400
Interest
Expense
731
400
738
SA
Change in
Carrying Value of Note
Carrying
Value of
Note
36560
331
36891
338
37229
400
745
345
37574
400
751
351
37925
Transcribed Image Text:Blossom Inc. developed a new sales gimmick to help sell its inventory of new automobiles. Because many new car buyers need financing, Blossom offered a low downpayment and low car payments for the first year after purchase. It believes that this promotion will bring in some new buyers. On January 1, 2025, a customer purchased a new $38,200 automobile, making a downpayment of $1,640. The customer signed a note indicating that the annual rate of interest would be 8% and that quarterly payments would be made over 3 years. For the first year, Blossom required a $400 quarterly payment to be made on April 1, July 1, October 1, and January 1, 2026. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, 2028. Click here to view factor tables. (a) Your answer is partially correct. Prepare a note amortization schedule for the first year. (Round answers to 0 decimal places, e.g. 38,548. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Cash Paid 400 Interest Expense 731 400 738 SA Change in Carrying Value of Note Carrying Value of Note 36560 331 36891 338 37229 400 745 345 37574 400 751 351 37925
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