Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below. If Gingerbread Corp decided to pay off the entire principle balance left on the loan of $119,590 at the end of period 3 how much would the company save in interest expense? Interest expense saved ?
Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below. If Gingerbread Corp decided to pay off the entire principle balance left on the loan of $119,590 at the end of period 3 how much would the company save in interest expense? Interest expense saved ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Gingerbread Corp was issued a $220,000 loan at 6%. The amortization schedule created by the company accountant is presented below.
If Gingerbread Corp decided to pay off the entire principle balance left on the loan of $119,590 at the end of period 3 how much would the company save in interest expense?
Interest expense saved ?
Transcribed Image Text:Principal
Balance
220,000
188,460
155,028
119,590
82,026
42,207
Annual
Interest
Principal
Payment
Рeriod
Payment
Expense
44,740
44,740
44,740
44,740
44,740
44,740
31,540
33,432
35,438
1
13,200
2
11,308
9,302
7,175
4,922
2,532
3
4
37,564
39,818
42,207
5
6
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education