How much is applied to the principal of the note 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?

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

Answered: Orion Industries plans to borrow…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 16P

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On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
Chemical Enterprises issues a note in the amount of $156,000 to a customer on January 1, 2018. Terms of the note show a maturity date of 36 months, and an annual interest rate of 8%. What is the accumulated interest entry if 9 months have passed since note establishment?
How much is applied to the principal of the note?
Subject: general accounting
On October 1, 2023, Parton Industries borrowed $12 million cash to provide working capital. The loan was made by Second Bank under a short-term line of credit. Parton issued an 8-month, “noninterest-bearing note.” 8% is the bank’s stated “discount rate.” Parton’s fiscal period is the calendar year. In Parton’s 2023 income statement interest expense for the note will be:
Weavile Corporation takes out a $100,000 cash loan from its bank by signing a 30%, 10-month promissory note on July 1. The journal entry at the note's maturity will include: Group of answer choices Debit to Interest Expense for $10,000 Credit to Cash for $100,000 Debit to Interest Expense for $30,000 Debit to Interest Expense for $15,000
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.
Prime Products hopes to borrow $73,000 on April 1 and repay it plus interest of $1,080 on June 30. The following data are available for the months April through June, during which the loan will be used: On April 1, the start of the loan period, the cash balance will be $41,800. Accounts receivable on April 1 will total $182,000, of which $156,000 will be collected during April and $20,800 will be collected during May. The remainder will be uncollectible. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three-month period follow: April May June Sales (all on account) $316,000 $575,000 $264,000 Merchandise purchases $214,000 $193,000 $ 151,500 Payroll $ 34,200 $ 34,200 $27,300 Lease payments $31,600 $31,600 $ 31,600 Advertising $ 74,000 $ 74,000 $ 43,000 Equipment purchases $70,500 Depreciation…
On January 26, Nyree Co. borrowed cash from Conrad Bank by issuing a 90-day note with a face amount of $45,600. Assume 360 days in a year. a. Determine the proceeds of the note, assuming the note carries an interest rate of 10%. b. Determine the proceeds of the note, assuming the note is discounted at 10%.
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.
Prime Products hopes to borrow $32,000 on April 1 and repay it plus interest of $800 on June 30. The following data are available for the months April through June, during which the loan will be used: a. On April 1, the start of the loan period, the cash balance will be $33,600. Accounts receivable on April 1 will total $142,800, of which $122,400 will be collected during April and $16,320 will be collected during May. The remainder will be uncollectible. b. The company estimates 30% of a month's sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% are bad debts that are never collected. Budgeted sales and expenses for the three- month period follow: April Sales (all on account) $ 366,000 May $ 634,000 June $ 340,000 Merchandise purchases Payroll $ 285,000 $ 203,000 $ 21,000 $ 21,000 Lease payments. $ 35,000 $ 35,000 $ 171,500 34,900 $ $ 35,000 Advertising $ 71,000 $ 71,000 $ 67,200 Equipment purchases $…
[The following information applies to the questions displayed below.] On January 1, MM Company borrows $340,000 cash from a bank and in return signs an 8% installment note for five annual payments of $85,155 each. 1. Prepare the journal entry to record issuance of the note. 2. For the first $85,155 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For the first $85,155 annual payment at December 31, what amount goes toward interest expense? What amount goes toward principal reduction of the note? Interest expense Principal reduction

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