E10.7 (LO 2) (Analyze instalment payment schedule.) The following instalment payment schedule is for a long-term bank loan payable: Interest Period Issue date 1 2 3 4 Instructions Cash Payment $23,097.48 23,097.48 23,097.48 23,097.48 23,097.48 Interest Expense $5,000.00 4,095.13 3,145.01 2,147.38 1,099.88 Reduction of Principal $18,097.48 19,002.35 19,952.47 20,950.10 21,997.60 Q Principal Balance $100,000.00 81,902.52 62,900.17 42,947.70 21,997.60 0 a. Assuming payments are made annually, what is the interest rate on the bank loan? b. Prepare the journal entry to record the first instalment payment. c. What are the current and non-current portions of the bank loan after the payment at the end of period 2?
E10.7 (LO 2) (Analyze instalment payment schedule.) The following instalment payment schedule is for a long-term bank loan payable: Interest Period Issue date 1 2 3 4 Instructions Cash Payment $23,097.48 23,097.48 23,097.48 23,097.48 23,097.48 Interest Expense $5,000.00 4,095.13 3,145.01 2,147.38 1,099.88 Reduction of Principal $18,097.48 19,002.35 19,952.47 20,950.10 21,997.60 Q Principal Balance $100,000.00 81,902.52 62,900.17 42,947.70 21,997.60 0 a. Assuming payments are made annually, what is the interest rate on the bank loan? b. Prepare the journal entry to record the first instalment payment. c. What are the current and non-current portions of the bank loan after the payment at the end of period 2?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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