Dan Dayle started a business by issuing an $98,000 face value note to First State Bank on January 1, Year 1. The note had a 8 percentannual rate of interest and a five-year term. Payments of $24,545 are to be made each December 31 for five years.Required:a. What portion of the December 31, Year 1, payment is applied to interest expense and principal?b. What is the principal balance on January 1, Year 2?c. What portion of the December 31, Year 2, payment is applied to interest expense and principal?Note: Round your answers to the nearest dollar amount.a. Interest expensea. Principalb.Principal balancec. Interest expensec.Principal

a) Interest Expense = Principal Amount x Interest Rate = $98,000 x 8% = $7,840a) Principal…

Answered: Dan Dayle started a business by issuing…

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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