The Continental Bank made a loan of $ 24 comma 000.00 on March 10 to Dr. Hirsch to purchase equipment for her office. The loan was secured by a demand loan subject to a variable rate ofinterest that was 5% on March 10. The rate of interest was raised to 5.25% effective July 1 and to 5.75% effective September 1. Dr. Hirsch made partial payments on the loan as follows: $1000 onMay 24; $700 on June 28; and $300 on October 22. Each payment is first applied to any accumulated interest. Any remainder is then used to reduce the outstanding principal. The terms of the noterequire payment on October 31 of any interest not paid off by partial payments. How much must Dr. Hirsch pay on October 31 ? Question content area bottom Part 1 Dr. Hirsch must pay $enter your response here on October 31. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Period 1 : March 10-June 30: 4 months @5%=24000*0.05*4/12=$500Period 2 : July 1 - August 31- 2…

Answered: The Continental Bank made a loan of $…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

The following selected transactions relate to liabilities of Colorado Adventures. Colorado's fiscal year ends on December 31. January 13 Negotiate a revolving credit agreement with First Bank that can be renewed annually upon bank approval. The amount available under the line of credit is $10 million at the bank's prime rate. February 1 Arrange a three-month bank loan of $3.8 million with First Bank under the line of credit agreement. Interest at the prime rate of 7% is payable at maturity. May 1 Pay the 7% note at maturity. Required: Record the appropriate entries, if any, on January 13, February 1, and May 1. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5 million should be entered as 5,000,000).)
University at student supplies needs funds to obtain books before the start of the semester. The store manager signed a promissory note with a face value of 28,080. Find the ordinary interest rate if the interest charges over 180 days are 780.
Rosewood Company made a loan of $7,000 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. What is the amount of interest revenue that Rosewood would report in Year 1 and Year 2, respectively? Multiple Choice O O $420 in Year 1 and $0 in Year 2 $0 in Year 1 and $420 in Year 2 $105 in Year 1 and $315 in Year 2 $315 in Year 1 and $105 in Year 2
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $670,000. The terms of the loan are 3.8% annual interest rate and payable in 8 months. Interest is due in equal payments each month. A. Compute the interest expense due each month. If required, round final answer to two decimal places. B. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. If required, round final answers to two decimal places. If an amount box does not require an entry, leave it blank. Oct. 20 May 20
On January 1, Year 1, Niagara Corporation arranges a $6,000 line of credit with Centennial Bank. It accepted the bank's offer of 1% above the prime rate with interest payments on December 31 of each year. All borrowings and repayments are to take place on January 1 of each year. Niagara begins its loan transactions with Centennial Bank by borrowing $2,000 on January 1, Year 1. Which of the following shows the effect of this event on the financial statements? Assets A. 2,000 B. 2,000 C. 2,000 D. 2,000 Multiple Choice O OOO Balance Sheet Liabilities + 2,000 n/a n/a 2,000 Option B Option D Option A Option C Stockholders' Equity n/a 2,000 2,000 n/a Revenue n/a 2,000 2,000 n/a Income Statement Expense n/a n/a n/a n/a = Net Income n/a 2,000 2,000 n/a Statement of Cash Flows 2,000 IA 2,000 IA 2,000 OA 2,000 FA
On March 8, Manuel borrowed $720.00 from his uncle at 4.3% per annum calculated on the daily balance. He gave his uncle six cheques for $110.00 dated the 8th of each of the next six months starting April 8 and a cheque dated October 8 for the remaining balance to cover payment of interest and repayment of principal. Construct a complete repayment schedule for the loan including totals for Amount Paid, Interest Paid, and Principal Repaid. Complete the repayment schedule below. (Round to the nearest cent as needed.) Balance Before Payment Amount Paid Balance After Payment Payment Number O Mar. 8 Interest Paid Principal Repaid $720.00 1 Apr. 8 $720.00 $110.00 2 May 8 $110.00 3 June 8 $110.00 4 July 8 $110.00 5 Aug. 8 $110.00 6 Sept. 8 $110.00 7 Oct. 8 $0.00 Totals:
Franklin Company obtained a $110,000 line of credit from the State Bank on January 1, Year 1. The company agreed to accept a variable interest rate that was set at 2% above the bank's prime lending rate. The bank's prime rate of interest and the amounts borrowed or repaid during the first three months of Year 1 are shown in the following table. Assume that Franklin borrows or repays on the first day of each month. Borrowing is shown as a positive amount and repayments are shown as negative amounts indicated by parentheses. 1-January 1-February 1-Marchi Amount Borrowed Prime Rate for the Month 4.08 4.58 5.08 Based on this information alone, the amount of interest expense recognized in March would be closest to: (Do not round intermediate calculations. Round your answer to the nearest whole number.) Multiple Choice $177, $309. (Repaid) $ 32,000 (11,000) 32,000 $199.
Recall that Kate previously obtained a $15,000 bank loan, signing a note payable, on November 30. The note required semiannual interest payments at the rate of six percent. The entire principal balance was due two years from the origination date of the note. Kate has been accruing interest on a monthly basis in the amount of $75. Kate would like to know how she should record the interest in May, the month she makes the first interest payment. She is unsure how much expense will need to be recorded in May. The upcoming interest payment is really not Kate’s main concern right now. She was just notified by a lawyer that she is being sued for copyright infringement. Mega Cards Incorporated, one of the largest greeting card companies, believes that one of Kate’s designs is too similar to one of Mega’s designs for it to be coincidence, and has, therefore, decided to sue Kate’s Cards. Mega has a prior reputation for suing small companies and settling out of court for lesser damages. Kate,…
On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years.
11). rosewood company made a loan of $12,600 to one of the company's employees on april 1, year 1. the one-year note carried a 6% rate of interest. what is the amount of interest revenue that rosewood would report in year 1 and year 2 respectively?
Dirk Ward borrowed $13,000.00 for investment purposes on May 13 on a demand note providing for a variable rate of interest and payment of any accrued interest on December 31. He paid $900 on June 8, $200 on September 10, and $600 on November 20. How much is the accrued interest on December 31 if the rate of interest was 8% on May 13, 8.6% effective August 1, and 9.2% effective November 1? The accrued interest on December 31 is $ ☐ . (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Rosewood Company made a loan of $12,200 to one of the company's employees on April 1, Year 1. The one-year note carried a 6% rate of interest. What is the amount of interest revenue that Rosewood would report in Year 1 and Year 2, respectively? Multiple Choice $0 in Year 1 and $732 in Year 2 $732 in Year 1 and $0 in Year 2 $183 in Year 1 and $549 in Year 2 $549 in Year 1 and $183 in Year 2

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS