Killion Company needs to purchase new equipment, but does not have enough cash to purchase it outright. Therefore, on 1/1/21, Killion finances the purchase of the equipment by borrowing $29,000 on a 4-year, 5% installment loan. The loan specifies that Killion needs to make 4 payments of $8,178 once a year for the next four years. Each installment payment goes towards both accrued interest and the principal on the loan. Each installment payment is made on December 31.
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- On January 1, 2018, Jimbo Enterprises purchased new equipment for its training center. The equipment cost $220,000. Jimbo paid $25,000 down and is required to pay the rest in semiannual installments for the next 8 years. Jimbo's cost of borrowing is 4%. What is the total amount of interest expense Jimbo will pay over the life of the loan?Acme purchases a new delivery truck making a cash payment of $10,000, a $12,000 trade-in on the old delivery truck and enters into a 5-year loan for the balance, requiring yearly payments of $6,000 each. The interest rate on the loan is 4% and the first payment is due at date of sale. What amount should Acme capitalize for the purchase of the delivery truck?Murray Countertops borrowed $6500 at an annual rate of 8% to buy a used forklift. Murray amortized the loan in 4 annual payments Prepare an amortization schedule, using the amortization table, for the loan and use it to answer the questions. Click here to view page 1 of the Amortization Table. Click here to view page 2 of the Amortization Table. The amount of interest for the first payment period is $ 520 (Round to the nearost cent as needed) The portion of the second payment that is applied to reduction of the principal is $
- Megabank granted an 8% 3-year loan to Global Company on January 1, 2018. The interest on the loan is payable every December 31. Megabank incurred P148,122 of direct origination cost but an origination fee of P300,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 9%. What is the amortized cost of the loan on December 31, 2019 in Megabank's accounting book ?National Bank granted a 10-year loan to Abbo Company in the amount of P1,500,000 with a stated interest rate of 6%. Payments are due monthly and are computed to be P16,650. National Bank incurred a P40,000 of direct loan origination cost and P20,000 of indirect loan origination cost. In addition, National Bank charged Abbo Company a 4-point nonrefundable loan origination fee. What is the initial carrying amount of the loan payable on the part of Abbo Company? a. 1,440,000 O b. 1,480,000 O c. 1,500,000 d. 1,520,000Dayannara Bank loaned P5,000,000 to Dama Company on January 1, 2007. The terms of the loan require principal payments of P1,000,000 each year for 5 years plus interest at 8%. The first principal and interest payment is due on December 31, 2007. Dama Company made the required payments during 2007 and 2008. However, during 2009 Dama Company began to experience financial difficulties and was not able to pay the next installment of principal and interest, this required Dayannara to reassess the collectibility of the loan. On December 31, 2009, Dayannara determined that the remaining principal payment will be collected starting December 31, 2010 but the collection of the interest is unlikely. Assume that Dayannara accrued interest on December 31, 2009 but did not continue to accrue interest because of its uncollectibillity. The present value of 1 at 8% is as follows:For one period 0.93For two periods 0.86For three periods 0.79 . What is the loan impairment loss on December 31, 2009?…
- Acosta holdings borrowed P9000 from smith corporation on January1, 1998 and P12000 on January 1,2000.Acosta holdings made a partial payment of P7000 on January1, 2001.It was agreed that the balance of the loan would be amortized by two payments. One on January 1,2002 and one January 1,2003.The second being 50% larger than the first.If the interestrate is 12%, what is the amount of each payment?Megabank granted an 8%, 3-year P 6,000,000 loan to Global Company on January 1, 2021. The interest on the loan is payable every December 31. Megabank incurred P 520,600 of direct origination cost but an origination fee of P 200,000 was charged against Global Company. The effective rate on the loan as a result of the origination fee and cost is now 6%. No. QUESTIONS Your Answer 1. What is the carrying value of the loan receivable on January 1, 2021 in Megabank's accounting books? 2. What is the carrying value of the loan receivable on December 31, 2023 in Megabank's accounting books?On January 1, 2002, Cougar Company received a two-year $500,000 loan. The loan calls for payments to made at the end of each year based on the prevailing market rate at January 1 of each year. The interest rate at January 1, 2002, was 10 percent. Aggie company also has a two-year $500,000 loan, but Aggie's loan carries a fixed interest rate of 10 percent. Cougar Company does not want to bear the risk that interest rates may increase in year two of the loan. Aggie Company believes that rates may decrease and they would prefer to have variable debt. So the two companies enter into an interest rate swap agreement whereby Aggie agrees to make Cougar's interest payment in 2003 and Cougar likewise agrees to make Aggie's interest payment in 2003. The two companies agree to make settlement payments, for the difference only, on December 31, 2003. If the interest rate on January 1, 2003 is 8 percent, what will be Cougar's settlement payment to/from Aggie? On January 1, 20x1, ABC Co. acquired 60%…
- On January 1, 2002, Cougar Company received a two-year $500,000 loan. The loan calls for payments to made at the end of each year based on the prevailing market rate at January 1 of each year. The interest rate at January 1, 2002, was 10 percent. Aggie company also has a twoyear $500,000 loan, but Aggie's loan carries a fixed interest rate of 10 percent. Cougar Company does not want to bear the risk that interest rates may increase in year two of the loan. Aggie Company believes that rates may decrease and they would prefer to have variable debt. So the two companies enter into an interest rate swap agreement whereby Aggie agrees to make Cougar's interest payment in 2003 and Cougar likewise agrees to make Aggie's interest payment in 2003. The two companies agree to make settlement payments, for the difference only, on December 31, 2003. If the interest rate on January 1, 2003, is 12 percent, what will be Cougar's settlement payment to/from Aggie? $5,000 payment $10,000 payment…Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $13,500 beginning immediately. The interest rate on the note is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.)Canliss Mining Company borrowed money from a local bank. The note the company signed requires five annual installment payments of $13,500 beginning immediately. The interest rate on the note is 6%. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) What amount did Canliss borrow? (Round your final answers to nearest whole dollar amount.) Table or calculator function: ? Payment: $13,500 n = 5 i = 6% Present Value: ?