Campus Flights takes out a bank loan in the amount of $218,899 on March 1. The terms of the loan include a repaymentof principal in 7 equal installments, paid annually from March 1. The annual interest rate on the loan is 10%, recognized in year 1.Compute the principal due in year 1 rounded to the whole dollar. Campus Flights takes out a bank loan in the amount of $432,587 on March 1. The terms of the loan include a repayment ofprincipal in 12 equal installments, paid annually from March 1. The annual interest rate on the loan is 10%, recognized at the endof the 12 equal installments.Compute the interest recognized in year 1 rounded to the whole dollar.

A loan is the transfer of funds from one party to another with the promise of repayment. In exchange…

Answered: Campus Flights takes out a bank loan in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Andrews Inc. issues a $497,000, 10% 3-year mortgage note on January 1. The note will be paid in three annual installments of $200,000, each payable at the end of the year. What is the amount of interest expense that should be recognized by Andrews Inc. in the second year?
Ontario Credit Union borrowed $275,000 at 9.5% compounded semi-annually from League Central to build an office complex. The loan agreement requires payment of interest at the end of every 6 months In addition, the credit union is to make equal payments into a sinking fund so that the principal can be retired in total after 20 years Interest earned by the fund is 8% compounded semi-annually (a) What is the semi-annual interest payment on the debt? (b) What is the size of the semi-annual deposits into the sinking fund? (c) What is the total annual cost of the debt? (d) What is the interest earned by the fund in the 32nd payment interval? (e) What is the book value of the debt after 16 years? (f) Prepare a partial sinking fund schedule showing details, including the book value of the debt, for the first three payments, the last three payments, and the totals. (a) The interest payment is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal…
You borrowed $25,000 from a bank at an interest rate of 12%, compoundedmonthly. This loan will be repaid in 48 equal monthly installments over fouryears. Immediately after your 20th payment, if you want to pay off the remainder of the loan in a single payment, the amount is close to(a) $15,723(b) $15,447(c) $15,239(d) $16,017
A company borrows $174,900 from a bank. The interest rate on the loan is 6 percent compounded semiannualy. The company agrees to repay the loan in equal semiannualy installments over the next five years. The first payment is to be made six months from now. (Use factor table in Appendix B for calculation) Required 1: What is the amount of each semiannual payment? $ Required 2: In the first payment, what is the amount of interest cancelled? $ Required 3: In the fifth payment, what is the amount of loan paid net of interest? $ Required 4: In the last payment, what is the amount of interest cancelled? $ Required 5: Assume the debt contract has the option to make one extraordinary payment of up to 20% of the principal. If the company decides to exercise the right and make the extra payment together with the 8th payment, how much it must pay in dollars at the 9th payment to pay off the loan? $
On January 1, 2021, Tropical Paradise borrows $33,000 by agreeing to a 6%, four-year note with the bank. The funds will be used to purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $775.01 are due at the end of each month with the first installment due on January 31, 2021. Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
A company borrows $159,600 from a bank. The interest rate on the loan is 6 percent compounded semiannualy. The company agrees to repay the loan in equal semiannualy installments over the next five years. The first payment is to be made six months from now. (Use factor table in Appendix B for calculation) Required 1: What is the amount of each semiannual payment? $ Required 2: In the first payment, what is the amount of interest cancelled? $ Required 3: In the fifth payment, what is the amount of loan paid net of interest? $ Required 4: In the last payment, what is the amount of interest cancelled? $ Required 5: Assume the debt contract has the option to make one extraordinary payment of up to 20% of the principal. If the company decides to exercise the right and make the extra payment together with the 8th payment, how much it must pay in dollars at the 9th payment to pay off the loan? $
Magnolia Corp. granted a loan to a borrower on January 1, 2023. The interest on the loan is 12% payable annually starting December 31, 2023. The loan matures in three years on December 31, 2025. Data related to the loan are: Principal amount10,000,000Origination fees charged against the borrower470,560Direct origination cost incurred235,000 1. The carrying amount of the loan as of January 1, 2023 is A. 9,529,440 B. 9,764,440 C. 10,235,000 D. 10,235,560 2. The carrying amount of the loan as of December 31, 2023 is A. 9,833,817 B. 9,912,213 C. 10,000,00 D. 10,235,560 3. The current portion of the note on December 31, 2023 is A. Nil B. 78,396 C. 9,833,817 D. 9,912,213 4. The noncurrent portion of the note on December 31, 2023 is A. Nil B. 9,833,817 C. 9,912,213 D. 10,000,000
104.
A company borrows $159,300 from a bank. The interest rate on the loan is 6 percent compounded semiannualy. The company agrees to repay the loan in equal semiannualy installments over the next five years. The first payment is to be made six months from now. (Use factor table in Appendix B for calculation) Required 1: What is the amount of each semiannual payment? $ Required 2: In the first payment, what is the amount of interest cancelled? $ Required 3: In the fifth payment, what is the amount of loan paid net of interest? $ Required 4: In the last payment, what is the amount of interest cancelled? $ Required 5: Assume the debt contract has the option to make one extraordinary payment of up to 20% of the principal. If the company decides to exercise the right and make the extra payment together with the 8th payment, how much it must pay in dollars at the 9th payment to pay off the loan? $
On January 1, 2020, Sukuna Bank loaned 4,000,000 to Satori Company. The interest of the loan is 7% payable at every year-end within the next 2 years. The effective rate on the loan is 9%. Data related to the loan: Direct Origination cost 450,000 Origination fees (275,000) Determine the initial carrying amount of the loan.
Robin borrowed $3000.00 from HSBC Bank Canada. The line of credit agreement provided for repayment of the loan in three equal monthly payments plus interest at 6.25% per annum calculated on the unpaid balance. Determine the total interest cost.

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