Accounting problem Orion Industries plans to borrow $750,000 from the SterlingNational Bank by signing a 5.5%, 20-year note on April 1. The noterequires 240 monthly payments of $5,170, which includes bothinterest and principal components.In Orion's budgeted debt service cost of $5,170 in April, how muchis applied to the principal of the note?a. $3,437b. $1,733c. $5,170d. $250

To calculate how much of the $5,170 payment is applied to the principal, we need to first determine…

Answered: Orion Industries plans to borrow…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 30P

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Sub-Cinema Inc. borrowed $10,000 on Jan. 1 and will repay the loan with 12 equal payments made at the end of the month for 12 months. The interest rate is 12% annually. If the monthly payments are $888.49, what is the journal entry to record the cash received on Jan. 1 and the first payment made on Jan. 31?
On January 1, Year 1, Mahoney Company borrowed $165,000 cash from Sun Bank by issuing a 5-year, 8% term note. The principal and interest are repaid by making annual payments beginning on December 31, Year 1. The annual payment on the loan equals $41,325. What is the amount of principal repayment included in the payment made on December 31, Year 1? Multiple Choice O O оо $37,398 $40,650 $13,200 $28,125
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On January 1, 20x1, Next Co. obtains a P4,000,000 bank loan due on December 31, 20x4. Interest of 12% is due annually. The bank charges Next Co. an 11.19% nonrefundable loan origination fee. The effective interest rate on the loan is approximately equal to a. 11.19% b. 12% c . 16 % d. 17.37%
American Bank has loaned $12,000 to Shoreline Petroleum Inc. using a 60-day non-interest-bearing note. The bank discounted the note at 12%. The proceeds of the loan will be a.$240. b.$12,240. c.$12,000. d.$11,760.
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Accounts receivable in the amount of $658,000 were assigned to the Fast Finance Company by Sunland, Inc., as security for a loan of $564,000. The finance company assessed a 4% finance charge on the face amount of the loan, and the note bears interest at 8% per year.During the first month, Sunland collected $366,600 on assigned accounts. This amount was remitted to the finance company along with one month's interest on the note.Make all the entries for Sunland Inc. associated with the transfer of the accounts receivable, the loan, and the remittance to the finance company. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,275.) Account Titles and Explanation Debit Credit (To record the transfer of the accounts receivable.) (To record the loan amount…
On September 1, 2022, Accounts receivable in the amount of $900,000 were assigned as collateral to the Credit Suisse Finance Company by Gemini, Inc., as security for a loan of $750,000. The finance company assessed a 5% finance charge on the face amount of the loan, and the note bears interest at 9% per year. During the month of September, Gemini collected $425,000 on assigned accounts. This amount was remitted to Credit Suisse along with one month's interest on the note on October 1, 2022. Instructions Make all the journal entries for Gemini Inc. associated with the transfer of the accounts receivable, the loan, and the remittance to the Credit Suisse.
Anderson Co. issued a $42,646, 60-day, discounted note to National Bank. The discount rate is 11%. At maturity, assuming a 360-day year, the borrower will pay:
On June 30, 2021, the High Five Surfboard Company had outstanding accounts receivable of $600,000. On July 1, 2021, the company borrowed $450,000 from the Equitable Finance Corporation and signed a promissory note. Interest at 10% is payable monthly. The company assigned specific receivables totaling $600,000 as collateral for the loan. Equitable Finance charges a finance fee equal to 1.8% of the accounts receivable assigned.Required:Prepare the journal entry to record the borrowing on the books of High Five Surfboard.

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